SEC member: Advertising rule overhaul may be too vague

The agency announced the proposed changes in November, the first attempt to update the requirements since 1961. Under the proposed rule, the SEC allows consultants to post third-party testimonials, endorsements, and reviews on social media. The attempt to raise advertising standards for consultants in the Internet age has been particularly popular with business consulting associations. But last month, in commentary letters, they also expressed concern that it was too long and unclear in some areas. SEC commissioner Allison Herren Lee expressed concern that the proposal’s principles-based approach would lead to compliance uncertainties. Under the proposed rule, the SEC allows consultants to post third-party testimonials, endorsements, and reviews on social media. Attempts to raise advertising standards for consultants in the Internet age are particularly popular with business consulting firms. But last month, in commentary letters, they also expressed concern that it was too long and unclear in some areas. SEC Commissioner Allison Herren Lee expressed concern that the principles-based approach to the proposal would lead to compliance uncertainties.

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