It is well-known that high-profile jurisdictions such as California and New York City have in certain instances placed lobbyist registration requirements on investment managers that solicit investment advisory business from state and local entities that manage retirement funds for government employees (“Public Pension Systems”). To ensure their compliance with the laws, however, investment managers must become familiar with developments in many other jurisdictions that have placed significant restrictions and obligations on investment managers that solicit Public Pension Systems. States such as Florida, Illinois, Indiana, Kentucky, Louisiana, Massachusetts and New Jersey, as well as various cities and counties including Philadelphia, Los Angeles, San Diego and San Francisco, are but a few examples.

Unfortunately, these state and local laws are far from uniform, and investment managers must assess the applicable restrictions with respect to each Public Pension System whose funds they seek to manage. An investment manager may be subject to state and local laws that require its marketing staff and third-party marketers to register as lobbyists or placement agents; that restrict or prohibit the payment of contingent compensation to such marketing personnel; that require the investment manager to disclose in detail its marketing arrangements; and that restrict or prohibit the making of political contributions and the offering of gifts and entertainment. These laws are in addition to, and in many cases more burdensome than, Rule 206(4)-5 (the "SEC Pay-to-Play Rule"), which was adopted in 2010 by the US Securities and Exchange Commission (the SEC) under the Investment Advisers Act of 1940, as amended, to govern political contributions by advisers.