4.7.2.3. Presenting Performance Information
In addition to the seven prohibitions discussed previously, the Marketing Rule also presents specific guidance for presenting performance information in advertisements. Because of the particular risk of performance information being misleading, all statistics and information related to the performance of an investment adviser must follow these requirements.
• Gross performance. Gross performance results are the earnings of a portfolio before fees or expenses have been deducted. Net performance is the earnings after deducting these costs. The gross earnings of a portfolio may not be displayed in advertisements unless net performance is displayed alongside with equal prominence.
• Commission approval. Investment advisers cannot in any way indicate advertisements have been approved or reviewed by the SEC or any othe