The U.S. Securities and Exchange Commission (SEC) has proposed amendments to modernize its rules for investment advisor advertising to reflect changing industry practices and technology.

Among other things, the proposed changes would replace the existing prohibitions with principles-based measures. Further, they would allow the use of testimonials, endorsements and third-party ratings, subject to certain conditions, in advertising.

“The advertising and solicitation rules provide important protections when advisors seek to attract clients and investors, yet neither rule has changed significantly since its adoption several decades ago,” noted Jay Clayton, chair of the SEC.

“The reforms we have proposed today are designed to address market developments and to improve the quality of information available to investors, enabling them to make more informed choices,” he added.

The proposals are out for a 60-day comment period.

Separately, the SEC announced it will take another couple of years to consider the impact of Europe’s new rules on paying for equity research, which aim to eliminate the use of “soft dollars.”

The SEC issued an extension of a no-action letter that it introduced in 2017 to assist firms in complying with Europe’s reforms, known as MiFID II, when it comes to paying for research.

The SEC’s relief was set to expire in 2020, but has been extended until July 2023.

The no-action relief from the chief counsel’s office in the SEC’s division of investment management said that SEC staff will not take enforcement action against broker-dealers that accept payments for their research either in actual dollars, or through accounts subject to MiFID II.

The original no-action letter was intended to give both the SEC and the investment industry “time to better understand the evolution of business practices after the implementation of MiFID II.”

Payments for research practices have evolved, but “challenges remain,” the SEC said in its latest letter, adding that the supply and demand for research also continues to evolve.

As a result, the SEC decided to take more time to determine whether U.S. regulatory action is appropriate.

“Today’s extension of the staff’s no-action letter is an important step in our continued efforts to address changes in the market for research payments driven by MiFID II with an eye toward preserving investor access to research to the maximum extent possible,” said Clayton.

Clayton said the extension will allow SEC staff to continue monitoring the impact of the MiFID II rules.