In previous blogs, we talked about the FTC, and the SEC is its best friend. It's an organization that helps secure laws to protect more than 66 million Americans. For more than 85 years now, they've stayed true to their mission of protecting investors, while maintaining an orderly and efficient marketplace.
Here at 154, we stay informed about the SEC guidelines for those public company clients because it's important for the SEC to maintain the details that they require for you to advertise your company in their marketing efforts. In December 2020, something really amazing happened. There was a reform of the Investment Advisor Act.
This happened due to technological advances. The act hadn't really been updated in a while, but the way that people were seeking investment advice changed drastically. So the final rule was designed to comprehensively and efficiently regulate investment advisors and marketing communications. I think it's really cool that the SEC realized that things were changing, and so their laws also had to change.
The technology used for communications, as we all know, through TikTok, Instagram, the Public app, Robinhood, and various other chat rooms in which we can get advice for investments is just a whirlwind that the SEC had to keep up with. This new rule replaces broadly based limitations with principle-based provisions designed to accommodate the continual evolution that is happening with our technology.
Think about it, before you finish programming or setting up your newest device, a new model is always coming out, and right when you find out a new model is coming out, a new platform is being developed by the next Mark Zuckerberg. The rules will require advisors to standardize certain parts of their presentations so that the investor can have an adequate amount of time and information to make proper comparisons of their investment opportunities.
Also, advertisements that include third-party ratings will be required to include specific disclosures to prevent them from being misleading. Overall, we are not surprised that this act was reformed in 2020. Unless you are living under a rock, you should know that TikTok has become one of the most influential platforms in the industry.
When it comes to people seeking new investment opportunities, whether in crypto, small-cap, or mega caps, the SEC picked up on the fact that people are listening to influencers and people chatting on various platforms. But remember, the SEC is your friend, especially if you're an investor.
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