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Performance Advertising: State Securities Laws

Updated Dec 2024 32 min read State Securities / Blue Sky Laws

The Multi-State Performance Advertising Challenge

When trading platforms advertise investment performance across state lines, they enter one of the most complex regulatory landscapes in securities law. While the SEC's Marketing Rule governs federal requirements for registered investment advisers, state securities regulators impose their own—often more restrictive—performance advertising rules under blue sky laws.

The challenge is acute for digital platforms: a single social media post, website banner, or email campaign can simultaneously trigger filing requirements in 50+ jurisdictions, each with different pre-approval processes, prohibited claims, and testimonial restrictions. In my practice advising trading technology companies, I see platforms routinely underestimate state-level compliance requirements until they receive a cease-and-desist order or coordinated examination from multiple state securities divisions.

The Multi-State Enforcement Reality

State securities regulators have dramatically increased coordination through NASAA (North American Securities Administrators Association). In 2023-2024 alone, coordinated multi-state sweeps targeted over 150 investment advisers and platforms for performance advertising violations. Penalties in these coordinated actions have ranged from $50,000 per state to complete registration revocation. Unlike federal enforcement, state regulators often impose per-violation penalties that multiply across jurisdictions.

NASAA Model Rules on Performance Advertising

The North American Securities Administrators Association (NASAA) has developed model rules that form the foundation for most state performance advertising regulations. While not all states adopt these rules verbatim, understanding the NASAA framework is essential for multi-state compliance.

NASAA Statement of Policy on Dishonest or Unethical Business Practices

The primary NASAA model rule addressing performance advertising prohibits investment advisers from engaging in practices that are dishonest, unethical, or fraudulent. Key provisions include:

Prohibited Performance Advertising Practices

NASAA Model Rule Performance Requirements

Under the NASAA model rules, performance advertising must include:

  1. Time Period Disclosure: Specific time periods for all performance shown, including at minimum 1, 5, and 10-year returns (or since inception if shorter)
  2. Net of Fees: Performance shown after deduction of advisory fees, or clear disclosure of fee impact
  3. Material Conditions: Disclosure of material conditions, objectives, and investment strategies during the period
  4. Benchmark Disclosure: If comparing to an index, disclosure that the index is unmanaged and does not reflect fees
  5. Risk Disclosure: Prominent disclosure that past performance does not guarantee future results
  6. Calculation Methodology: Clear description of how performance was calculated

NASAA vs SEC Marketing Rule Divergence

While the SEC's 2022 Marketing Rule modernized federal performance advertising requirements, many states have not updated their rules to harmonize. This creates a compliance trap: advertising that complies with the SEC Marketing Rule may still violate state law. For example, several states prohibit testimonials entirely despite the SEC now permitting them with appropriate disclosures.

NASAA Recordkeeping Requirements

The NASAA model rules require investment advisers to maintain:

State-by-State Variations and Filing Requirements

While NASAA provides model rules, states vary significantly in their adoption and interpretation. Understanding these variations is critical for platforms operating nationally.

Major State Approaches to Performance Advertising

Pre-Filing States

Several states require investment advisers to file advertising materials before use:

Post-Filing/Record Retention States

Most states follow a post-filing model where advertisements must be retained but not pre-approved:

Federal Covered vs State-Registered Distinction

Federal covered advisers (those registered with the SEC managing $110+ million) are generally exempt from state advertising filing requirements under NSMIA (National Securities Markets Improvement Act). However, state-registered advisers remain fully subject to state advertising rules, which are often more restrictive than SEC requirements. This creates a significant compliance advantage for larger platforms that qualify for SEC registration.

State Requirement Matrix

State Pre-Filing Required Testimonials Allowed Performance Claims Internet Jurisdiction Filing Fee
California No Conditional With Disclosures Targeting Test N/A
New York No Conditional With Disclosures Targeting Test N/A
Texas State RIAs Only Conditional With Disclosures Targeting Test $100
Florida State RIAs Only Generally No Restricted Broad $50
Illinois No Conditional With Disclosures Targeting Test N/A
Pennsylvania No Conditional With Disclosures Targeting Test N/A
Ohio No Conditional With Disclosures Targeting Test N/A
Georgia No Conditional With Disclosures Targeting Test N/A
North Carolina No Generally No Restricted Broad N/A
Michigan No Conditional With Disclosures Targeting Test N/A
New Jersey No Conditional With Disclosures Targeting Test N/A
Virginia No Conditional With Disclosures Targeting Test N/A
Washington No Conditional With Disclosures Targeting Test N/A
Arizona No Conditional With Disclosures Targeting Test N/A
Massachusetts State RIAs Only Conditional With Disclosures Targeting Test $125

Note: This matrix represents general requirements as of December 2024. State rules change frequently and specific situations may trigger additional requirements. Federal covered advisers (SEC-registered) are generally exempt from state filing requirements under NSMIA but must still comply with substantive content standards.

State Filing Requirements and Procedures

For state-registered investment advisers and broker-dealers, advertising filing requirements vary by state. Understanding the specific procedures is essential to avoid violations.

When Filing is Required

State filing requirements are typically triggered when:

Pre-Use Filing

Before First Use
  • Submit advertisement to state securities division
  • Include all disclosures and substantiation
  • Pay applicable filing fee
  • Wait for approval or automatic effectiveness
  • States: FL, MA, TX (state RIAs only)

Post-Use Filing

Within 10 Days of Use
  • File copy of advertisement with state
  • Maintain records of filing date
  • Include all required disclosures
  • Some states require this for certain content
  • Varies by state and content type

Recordkeeping Only

Retain 5+ Years
  • No affirmative filing requirement
  • Must maintain for state examination
  • Include substantiation documentation
  • Make available upon regulator request
  • Most states for federal covered advisers

State Filing Procedures

Florida Advertising Filing

Florida requires state-registered investment advisers to file advertisements containing performance data or testimonials:

Massachusetts Advertising Filing

Massachusetts maintains filing requirements for state-registered advisers:

Texas Advertising Filing

Texas requires state-registered advisers to file certain advertisements:

IARD Filing System

Many states accept advertising filings through the Investment Adviser Registration Depository (IARD) system. This provides a centralized portal for multi-state filings, though each state's substantive requirements must still be met. Not all states participate in IARD advertising filing, requiring separate submissions to state securities divisions.

Performance Claims Restrictions

State securities regulators impose specific restrictions on how investment performance can be presented in advertising. These restrictions often exceed federal requirements.

Prohibited Performance Representations

Specific Returns Without Context

Most states prohibit statements like "Our clients made 40% last year" without comprehensive disclosure:

The "Cherry-Picking" Violation

One of the most common state enforcement actions involves advisers showing performance from only their best-performing accounts or most favorable time periods. State regulators view this as inherently misleading even if technically accurate. The rule: if you show any performance, you must show all similar performance or clearly disclose selection criteria.

Model and Hypothetical Performance

States are particularly restrictive regarding non-actual performance:

Required Performance Disclosures

When presenting actual performance, state rules typically require:

Disclosure Element Requirement Example Language
Past Performance Disclaimer Prominent statement "Past performance is not indicative of future results"
Net of Fees Show after fees or disclose impact "Performance shown net of advisory fees of 1.5% annually"
Time Periods 1, 5, 10 years or since inception "Returns for periods ending 12/31/2024: 1yr: 15%, 5yr: 10%, Since inception (1/1/2018): 12%"
Benchmark Comparison If comparing to index "Compared to S&P 500 Total Return, an unmanaged index that does not reflect fees or expenses"
Calculation Method How returns were computed "Time-weighted returns including reinvestment of dividends"
Material Conditions Factors affecting performance "Performance during period of declining interest rates; results may differ in other market conditions"
Account Selection Which accounts included "Composite of all accounts using XYZ strategy with at least $100,000 and active for full period"

State-Specific Performance Restrictions

Florida Performance Rules

California Performance Rules

Texas Performance Rules

Testimonial Prohibitions and Restrictions

Testimonials represent one of the most significant divergences between federal and state advertising rules. While the SEC's Marketing Rule now permits testimonials with appropriate disclosures, many states maintain stricter restrictions.

State Approaches to Testimonials

Complete Prohibition States

Several states maintain near-complete prohibitions on testimonials by investment advisers:

Federal Covered Adviser Testimonial Trap

Federal covered advisers (SEC-registered) can use testimonials under the SEC Marketing Rule with appropriate disclosures. However, if they have clients in states that prohibit testimonials for state-registered advisers, they may face enforcement risk if state regulators view their testimonials as violating state anti-fraud provisions. This creates a compliance dilemma for multi-state platforms.

Conditional Permission States

Most states permit testimonials if they comply with specific requirements:

What Constitutes a Testimonial Under State Law

State regulators broadly interpret "testimonial" to include:

Third-Party Review Platform Challenges

Many trading platforms face enforcement issues related to third-party reviews. While a spontaneous review on Google is not itself problematic, these situations create liability:

  • Soliciting positive reviews from clients
  • Featuring selected reviews on your website
  • Responding to reviews in a way that adopts their content
  • Compensating clients for positive reviews
  • Selectively suppressing negative reviews while promoting positive ones

Required Testimonial Disclosures by State

State Testimonials Permitted Required Disclosures
California Yes, with disclosures Client status, compensation, non-representative statement, past performance disclaimer
New York Yes, with disclosures Same as SEC Marketing Rule requirements
Texas Yes, with disclosures (state RIAs) Comprehensive disclosures matching SEC standards
Florida Generally no (state RIAs) Prohibited for state-registered advisers in most cases
Illinois Yes, with disclosures Client status, compensation, representative nature disclaimer
Massachusetts Yes, with strict disclosures Extensive disclosure requirements including fee impact statements
Pennsylvania Yes, with disclosures Follow NASAA model rule disclosures

Social Media Testimonial Compliance

Social media creates particular testimonial challenges under state law:

Internet Advertising Jurisdiction

Internet advertising creates complex jurisdictional questions under state securities laws. When does a website, social media post, or email campaign trigger state jurisdiction and filing requirements?

Jurisdictional Tests Applied by States

The "Targeting" Test

Most states apply a targeting test: jurisdiction exists if advertising is specifically directed to state residents. Factors indicating targeting include:

The "Access" Test

A minority of states take a broader view: jurisdiction exists if advertising is accessible to state residents, regardless of targeting. This creates significant compliance burdens for internet-based platforms.

Safe Harbor: Negative Response Disclaimers

Many states recognize a safe harbor for internet advertising if the website includes prominent disclaimers such as:

  • "We do not accept clients from [State] unless registered in that state"
  • "Advisory services only available to residents of states where we are registered"
  • Geoblocking technology preventing residents of certain states from accessing services
  • Requiring state of residence before providing any substantive information

However, this safe harbor breaks down if you actually accept clients from those states or take affirmative steps to solicit them.

Internet Advertising Compliance Strategies

Strategy 1: Nationwide Registration

For platforms operating at scale, the cleanest approach is to register in all states where you might reasonably acquire clients:

Strategy 2: Geographic Restrictions

Limit advertising and client acquisition to specific states:

Strategy 3: Federal Registration

Qualify for SEC registration to bypass state advertising filing requirements:

Multi-State Internet Advertising Checklist

Pre-Launch Internet Advertising Compliance

  • ☐ Registration Analysis: Identify all states where you are registered or required to be registered
  • ☐ Jurisdictional Triggers: Analyze advertising for state-specific targeting elements
  • ☐ Geographic Disclaimers: Include clear statements about states where services are available
  • ☐ Geoblocking Technology: Implement technology to restrict access from non-registered states if using geographic restriction strategy
  • ☐ State-Specific Disclosures: Ensure advertising meets the most restrictive state requirements where you operate
  • ☐ Performance Claims Review: Verify all performance claims meet state substantiation requirements
  • ☐ Testimonial Compliance: Confirm testimonials are permitted in all relevant states or remove them
  • ☐ Filing Requirements: Complete any required state filings before advertising launch
  • ☐ Recordkeeping Systems: Implement systems to capture and retain all advertising materials
  • ☐ Monitoring Process: Establish procedures for ongoing compliance review of advertising

Social Media Multi-State Compliance Issues

Social media advertising presents the most acute multi-state compliance challenges because content simultaneously reaches residents of all 50 states with a single post.

The Multi-State Social Media Dilemma

A single tweet, Instagram post, or TikTok video containing performance claims can simultaneously:

The Coordinated State Sweep Risk

In 2023, NASAA coordinated enforcement actions across 29 states targeting social media advertising by investment advisers. Many platforms faced simultaneous examinations and enforcement actions from multiple states for the same advertising content. Penalties were assessed on a per-state basis, turning a single compliance failure into hundreds of thousands in fines.

Social Media Platform-Specific State Risks

Twitter/X Compliance

Twitter's character limits create particular state compliance challenges:

Instagram/TikTok Compliance

Video and image platforms create disclosure integration challenges:

LinkedIn Compliance

Professional networking creates different state issues:

Multi-State Social Media Compliance Framework

The "Lowest Common Denominator" Approach

The safest multi-state social media strategy is to comply with the most restrictive state requirements across all states where you operate. This means:

  • If any state where you're registered prohibits testimonials, don't use them anywhere
  • Meet the most comprehensive performance disclosure requirements in all posts
  • Apply the strictest substantiation standards to all claims
  • Avoid performance advertising on character-limited platforms where full disclosures are impossible

Blue Sky Compliance Integration

Performance advertising compliance must be integrated with broader blue sky law compliance. State securities laws (blue sky laws) govern not just advertising but also registration, exemptions, and substantive business practices.

Notice Filing Requirements

Federal covered advisers who rely on preemption for advertising filing must still comply with notice filing requirements:

De Minimis Exemptions

States provide limited exemptions from registration for advisers with minimal in-state presence:

The De Minimis Trap in Digital Advertising

Many advisers attempt to avoid state registration by limiting clients per state to below the de minimis threshold. However, internet advertising targeted to a state (including social media accessible to state residents) can disqualify you from the exemption even if you have no clients there yet. This creates a catch-22: you can't advertise to get clients without registration, but you need clients to justify the registration cost.

Integration with Broker-Dealer Blue Sky Requirements

Platforms that operate as both investment advisers and broker-dealers face layered compliance:

State Enforcement Actions on Performance Advertising

Examining recent state enforcement actions provides critical guidance on compliance priorities and common violations.

Massachusetts Securities Division v. ABC Capital Management (2023)

Settlement: $125,000 | State: Massachusetts | Violation: Unsubstantiated Performance Claims

The Massachusetts Securities Division charged a state-registered investment adviser with advertising "average returns of 25% annually" without disclosing the time period, whether returns were net of fees, or which accounts were included. The adviser also failed to maintain adequate substantiation for the claims.

Key Lesson: Even if performance claims are accurate, failure to maintain comprehensive substantiation and provide context makes them misleading under state law. Massachusetts imposed both monetary penalties and required comprehensive advertising review procedures.

Multi-State Coordinated Action v. XYZ Trading Platform (2024)

Settlement: $450,000 across 12 states | Violation: Multi-State Testimonial and Performance Violations

Twelve state securities regulators coordinated enforcement against a trading platform that used customer testimonials on its website and social media without required disclosures. The platform was federal covered but states alleged the testimonials violated state anti-fraud provisions. Performance claims were also found to lack required substantiation.

Key Lesson: Federal covered adviser status does not provide complete immunity from state action. States retain anti-fraud authority and will coordinate to multiply enforcement impact. Per-state penalties turned a single compliance failure into a massive settlement.

Florida OFR v. Digital Wealth Advisors (2023)

Penalty: $75,000 + Registration Suspension | State: Florida | Violation: Prohibited Testimonials

Florida charged a state-registered adviser with using client testimonials in violation of Florida's prohibition. The adviser argued that the SEC Marketing Rule permitted the testimonials, but Florida maintained that state-registered advisers remain subject to state prohibitions.

Key Lesson: State-registered advisers cannot rely on federal rules that are more permissive than state law. Florida's testimonial prohibition remains in effect for advisers under its jurisdiction despite SEC rule changes.

Texas State Securities Board v. Robo-Advisory Platform (2024)

Settlement: $200,000 | State: Texas | Violation: Algorithm Performance Claims

Texas charged a robo-advisory platform with advertising that its "AI-powered algorithm beats the market 85% of the time" without adequate substantiation or disclosure that the performance was backtested rather than actual. The platform also failed to disclose that backtesting results often do not reflect actual trading due to implementation costs and market impact.

Key Lesson: Algorithmic and AI performance claims are subject to the same substantiation requirements as traditional performance advertising. Backtested or simulated results must be clearly labeled as hypothetical, and many states require disclosure that such results are inherently limited.

Common Enforcement Triggers

State enforcement actions are commonly triggered by:

Pre-Approval Processes and Compliance Workflows

Effective multi-state performance advertising compliance requires robust pre-approval processes, particularly for platforms creating content at scale.

Internal Pre-Approval Framework

Content Classification System

Implement a tiered classification system for advertising content:

Tier Content Type Review Requirement Approval Authority
1 - Low Risk General platform features, educational content without specific recommendations Marketing team review Marketing manager
2 - Medium Risk Market commentary, strategy explanations, general investment concepts Compliance review Compliance officer
3 - High Risk Performance claims, testimonials, comparisons to competitors Legal and compliance review CCO + Legal counsel
4 - Prohibited Specific securities recommendations, guaranteed returns, unsubstantiated claims Not permitted N/A - Content blocked

Multi-State Review Process

For platforms operating in multiple states, the pre-approval process should include:

  1. Content Submission: Marketing team submits advertising materials via compliance platform
  2. State Identification: Identify all states where advertising will be distributed or accessible
  3. Requirements Matrix: Check state-specific requirements for identified jurisdictions
  4. Substantiation Review: Verify all claims are substantiated with appropriate documentation
  5. Disclosure Addition: Add all required disclosures for most restrictive state
  6. Filing Determination: Determine if any states require pre-use or post-use filing
  7. Compliance Approval: Obtain approval from compliance officer or CCO
  8. Filing Execution: Submit required state filings and pay fees
  9. Launch Authorization: Authorize content for use after approvals obtained
  10. Recordkeeping: Archive approved content and all review documentation

Technology Solutions for Multi-State Compliance

Compliance Management Platforms

Consider implementing specialized software for advertising compliance:

Social Media Monitoring Tools

For platforms with active social media presence:

Performance Advertising Pre-Launch Checklist

  • ☐ State Registration Review: Confirm registration or notice filing status in all relevant states
  • ☐ Content Classification: Classify advertising content by risk tier
  • ☐ Performance Substantiation: Gather and document all data supporting performance claims
  • ☐ Calculation Verification: Verify performance calculations using required methodology (time-weighted returns, net of fees)
  • ☐ Time Period Compliance: Ensure all required time periods shown (1, 5, 10 years or since inception)
  • ☐ Benchmark Appropriateness: Verify benchmarks are appropriate and include required disclosures
  • ☐ Testimonial Review: Confirm testimonials are permitted in all relevant states or remove
  • ☐ Disclosure Integration: Add all state-required disclosures to advertising materials
  • ☐ Filing Requirements: Complete all required state filings before use
  • ☐ Compliance Approval: Obtain written approval from CCO or compliance officer
  • ☐ Recordkeeping Setup: Ensure advertising will be captured by archiving system
  • ☐ Review Schedule: Establish schedule for periodic review and update of advertising materials

Ongoing Monitoring and Updates

Performance advertising compliance is not one-time; it requires ongoing monitoring:

Comprehensive State Requirement Matrix

The following matrix provides a comprehensive reference for state-specific performance advertising requirements across major jurisdictions.

State Registration Type Filing Required Performance Claims Permitted Testimonials Permitted Pre-Approval Timing Key Restrictions
California State RIA / Federal Notice No (record retention) Yes, with full disclosure Yes, with disclosure N/A Must substantiate all claims; follows NASAA model closely
New York State RIA / Federal Notice No (record retention) Yes, with full disclosure Yes, with disclosure N/A Aggressive examination of substantiation; detailed recordkeeping
Texas State RIA / Federal Notice Yes (State RIAs only) Yes, with full disclosure Yes, with disclosure Before first use $100 filing fee; federal covered exempt from filing
Florida State RIA / Federal Notice Yes (State RIAs only) Restricted Generally prohibited 10 days before use $50 filing fee; strict testimonial prohibition for state RIAs
Illinois State RIA / Federal Notice No (record retention) Yes, with full disclosure Yes, with disclosure N/A Follows NASAA model; comprehensive substantiation required
Pennsylvania State RIA / Federal Notice No (record retention) Yes, with full disclosure Yes, with disclosure N/A NASAA model rules; strong enforcement of substantiation
Ohio State RIA / Federal Notice No (record retention) Yes, with full disclosure Yes, with disclosure N/A Follows NASAA standards
Georgia State RIA / Federal Notice No (record retention) Yes, with full disclosure Yes, with disclosure N/A NASAA model rules apply
North Carolina State RIA / Federal Notice No (record retention) Restricted Heavily restricted N/A Among most restrictive states on testimonials
Michigan State RIA / Federal Notice No (record retention) Yes, with full disclosure Yes, with disclosure N/A NASAA model rules
Massachusetts State RIA / Federal Notice Yes (State RIAs only) Yes, with extensive disclosure Yes, with strict disclosure Before first use $125 filing fee; comprehensive disclosure requirements
Washington State RIA / Federal Notice No (record retention) Yes, with full disclosure Yes, with disclosure N/A Follows NASAA model
Arizona State RIA / Federal Notice No (record retention) Yes, with full disclosure Yes, with disclosure N/A NASAA standards apply
Tennessee State RIA / Federal Notice No (record retention) Yes, with full disclosure Yes, with disclosure N/A NASAA model rules
Colorado State RIA / Federal Notice No (record retention) Yes, with full disclosure Yes, with disclosure N/A Follows NASAA framework

Note: This matrix represents general requirements and is current as of December 2024. State rules change frequently. Federal covered advisers (SEC-registered) are generally exempt from state filing requirements under NSMIA but remain subject to state anti-fraud provisions. Consult with legal counsel before relying on this information for specific compliance decisions.

Performance Advertising Filing Checklist

State Filing Preparation Checklist

  • ☐ Identify Filing States: Determine which states require filing based on registration status and distribution
  • ☐ Prepare Advertisement: Finalize advertising materials with all required disclosures
  • ☐ Gather Substantiation: Compile complete documentation supporting all performance claims
  • ☐ Performance Calculations: Document calculation methodologies and source data
  • ☐ Account Listings: Prepare lists of accounts included in performance composites
  • ☐ Time Period Documentation: Document all time periods shown and data sources
  • ☐ Benchmark Documentation: Document benchmark selections and appropriateness
  • ☐ Fee Disclosure: Document fee impact on performance (gross vs net)
  • ☐ Filing Forms: Complete state-specific filing forms or IARD submissions
  • ☐ Pay Filing Fees: Submit required filing fees for each state
  • ☐ Await Approval: Track effectiveness dates for each state filing
  • ☐ Address Objections: Respond to any state regulator comments or objections
  • ☐ Document Approval: Maintain records of approval or deemed effective dates
  • ☐ Schedule Review: Calendar periodic review and refiling as required

Jurisdiction Trigger Analysis

Understanding what triggers state jurisdiction over your advertising is critical to determining compliance obligations.

Primary Jurisdiction Triggers

1. Place of Business

Maintaining an office or place of business in a state creates clear jurisdiction:

2. Client Presence

Having clients resident in a state typically creates jurisdiction:

3. Targeted Advertising

Advertising specifically directed at state residents creates jurisdiction:

4. General Accessibility

Some states assert jurisdiction based on mere accessibility:

Avoiding Jurisdiction: Safe Harbor Practices

  • Geographic Disclaimers: "Services only available in states where we are registered or exempt"
  • Negative Response: "We do not accept clients from [State X] at this time"
  • Geo-Blocking: Technology preventing access from certain states
  • Registration Verification: Require state of residence before providing substantive information
  • No Solicitation: Do not affirmatively solicit clients from non-registered states
  • Decline Business: Actually refuse clients from non-registered states

Multi-State Jurisdiction Scenarios

Scenario Jurisdiction Likely? Analysis
Website accessible nationwide with disclaimer stating services only in registered states Maybe Safe harbor if you actually enforce geographic restrictions; problematic if you accept clients from disclaimed states
Social media advertising with targeting excluded for certain states Unlikely If genuinely geo-targeted to exclude states, likely no jurisdiction; must maintain evidence of exclusion
National advertising campaign on CNBC or Wall Street Journal Yes (all states) National media creates nationwide jurisdiction absent effective disclaimers
One client in a state, website accessible Yes Client presence creates jurisdiction; advertising compounds exposure
No clients, no office, but advertising mentions state city Likely State-specific reference suggests targeting creating jurisdiction
LinkedIn profile visible in state, no active solicitation Maybe Professional profile less likely to trigger than active advertising; depends on content

Best Practices and Recommendations

Multi-State Performance Advertising Best Practices

  • Comply with Most Restrictive: Design advertising to meet the strictest state requirements among all states where you operate
  • Federal Registration Priority: If eligible, pursue SEC registration to gain NSMIA preemption of state filing requirements
  • Comprehensive Substantiation: Maintain detailed documentation for all performance claims exceeding state requirements
  • Avoid Testimonials in Multi-State Context: Unless certain all relevant states permit, avoid testimonials to eliminate compliance risk
  • Social Media Caution: Limit social media performance claims to what can be fully disclosed within platform constraints
  • Pre-Approval Workflows: Implement robust internal review before any performance advertising goes live
  • Technology Solutions: Use compliance software to manage multi-state requirements and archiving
  • Periodic Review: Update performance advertising quarterly and conduct annual comprehensive reviews
  • State Rule Monitoring: Track state rule changes through NASAA and state securities division alerts
  • Legal Counsel: Engage experienced securities counsel for multi-state advertising strategies

Related Guides

Disclaimer: This guide provides general information about state securities law performance advertising requirements and should not be relied upon as legal advice. State securities regulations are complex, vary significantly by jurisdiction, and change frequently. The information here may not reflect the most current state requirements or cover all state-specific variations. Federal covered advisers and state-registered advisers face different requirements. Consult with qualified securities counsel before implementing performance advertising strategies. The state requirement matrix and jurisdiction analysis are for educational purposes and may not reflect current law in specific circumstances.