New Member Firms
| WHAT | WHEN | FINRA RULE |
|---|---|---|
Retail communicationspublished or used in any public media including:
| 10 business days prior to first use for one year beginning on the date FINRA membership becomes effective in the CRD system | 2210(c)(1)(A) |
All Member Firms
| WHAT | WHEN | FINRA RULE |
|---|---|---|
Options retail communications used prior to the delivery of the Options Disclosure Document | 10 calendar days prior to first use; wait for FINRA staff approval | 2220(c)(1) |
| Registered investment company retail communications that include performance rankings that are not generally published or that are created by the investment company | 10 business days prior to first use or publication; required changes must be made before use or publication | 2210(c)(2)(A) |
| Security futures retail communications | 10 business days prior to first use or publication; required changes must be made before use or publication | 2210(c)(2)(B) |
| Retail Communications that promote or recommend a specific registered investment company or family of registered investment companies | Within 10 business days of first use or publication | 2210(c)(3)(A) |
| Public direct participation programs | Within 10 business days of first use or publication | 2210 (c)(3)(B) |
| Registered CMO retail communications | Within 10 business days of first use or publication | 2210(c)(3)(C) |
| Registered derivative retail communications | Within 10 business days of first use or publication | 2210(c)(3)(D) |
| Filmed versions of a TV or video previously filed as drafts or “storyboards” | Within 10 business days of first use or publication | 2210(c)(4) |
Frequently Asked Questions
Definitions
- 1. What are the categories that make up communications with the public?
- FINRA Rule 2210defines three categories of communications:
- Retail communication consists of any written (including electronic) communication that is distributed or made available to more than 25 retail investors within any 30 calendar-day period. A retail investor is any person other than an institutional investor, regardless of whether the person has an account with the firm.
- Correspondence consists of any written (including electronic) communication distributed or made available to 25 or fewer retail investors within any 30 calendar-day period.
- Institutional communication means any written (including electronic) communication that is distributed or made available only to institutional investors as defined but does not include a firm's internal communications. Institutional investors include banks, savings and loan associations, insurance companies, registered investment companies, registered investment advisors, a person or entity with assets of at least $50 million, government entities, employee benefit plans and qualified plans with at least 100 participants, FINRA member firms and registered persons, and a person acting solely on behalf of an institutional investor.
If a firm has reason to believe that a communication intended for institutional investors will be forwarded to or made available to a person that is not an institutional investor, the communication must not be treated as an institutional communication. Note that individual participants of employee benefit plans and qualified plans are not considered institutional investors.
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Internal Approval
- 1. What are the approval requirements for retail communications?
- FINRA Rule 2210(b) requires that all retail communications must be approved by an appropriately qualified registered principal before the earlier of its use or filing with FINRA's Advertising Regulation Department.
- 2. Are there any exceptions to the principal approval requirement for retail communications?
- A registered principal does not need to approve any retail communication that has already been filed with FINRA and that FINRA has deemed consistent with applicable standards, provided the communication has not been materially altered.
In addition, prior to use, approval is not required if a firm supervises and reviews the following types of retail communications in the same manner as correspondence pursuant to FINRA Rule 3110(b) and 3110 Supplementary Material .06 through .09:
- any retail communication that does not make any financial or investment recommendation or otherwise promote a product or service of the member.
- any retail communication that is posted on an online interactive electronic forum.
- Any retail communication that is excepted from the definition of “research report” pursuant to FINRA Rule 2241(a)(11(A) and 2242(a)(3)(A).
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Filing Requirements
- 1. What communications must be filed with FINRA prior to use?
- The following retail communications must be filed at least 10 business days prior to first use or publication:
- retail communications of new member firms used in any electronic or public media for one year beginning on the date the firm's FINRA membership becomes effective, as reflected in the CRD system. For example, this requirement applies to any generally accessible website; newspaper, magazine, telephone directory or other advertisem*nts; television or radio commercials; telephone or audio recordings; video displays, signs or billboards; and motion pictures;
- retail communications that include rankings or performance comparison information that is not generally published or that is created by the investment company;
- security futures retail communications; and
- retail communications concerning options used prior to delivery of the options disclosure document must be filed 10 calendar days prior to use.
- 2. What communications must be filed with FINRA within 10 business days?
- The following retail communications must be filed within 10 business days of use:
- registered investment company retail communications that promote or recommend a specific registered investment company or family of registered investment companies;
- retail communications concerning any structured or derivative product registered under the Securities Act;
- retail communications concerning public direct participation programs;
- retail communications concerning collateralized mortgage obligations registered under the Securities Act;
- final filmed versions of television and video communications previously filed in draft form.
- 3. What communications do not need to be filed with FINRA?
- The filing requirements do not apply to institutional communications and correspondence.
- 4. Must all retail communications be filed with FINRA?
- No, some retail communications are excluded from the filing requirements. However, it is important to note that whether a communication is subject to filing or not, firms must ensure that all their communications regarding financial products and services comply with applicable FINRA, SEC, MSRB and SIPC rules.
The following retail communications are excluded from the filing requirements:
- communications that refer to types of investments solely as a listing of the products or services offered by the firm;
- retail communications that do not make any financial or investment recommendation or promote a product or service of the firm;
- prospectuses, preliminary prospectuses, fund profiles, offering circulars, annual and semi-annual reports and similar documents filed with the SEC or any state in compliance with applicable requirements as well as offering documents concerning securities exempt from such filing or registration including free writing prospectuses exempt from filing with the SEC. Note: When reviewing a filed communication, FINRA staff may request, or members may provide the relevant product prospectus;
- previously-filed retail communications that are used without material change;
- retail communications based on previously filed templates, with changes limited to updates of more recent statistical or other non-narrative information and non-predictive narrative information that describes market events during the periods covered by the communication or sourced from the investment company’s regulatory documents filed with the SEC;
- retail communications posted on an online interactive electronic forum;
- press releases issued by NYSE-listed, closed-end investment companies as required by section 202.06 of the NYSE Listed Company Manual;
- retail communications subject to SEC Rule 134 and matter of record announcements regarding participation in a private placement (except for those related to public DPPs or registered investment company securities);
- press releases made available only to the members of the media;
- any reprint or excerpt of an article issued by a publisher that has not been materially altered in content except to comply with regulatory standards or correct errors and when the member has not commissioned the reprint and is not affiliated with the publisher; and
- retail communications that do no more than identify the member or offer a specific security at a stated price.
- 5. Can communications be filed voluntarily?
- Yes, firms may voluntarily file communications for review by FINRA. Some reasons for filing voluntarily include:
- new product launch;
- use of a new format or medium, such as the firm's first television commercial or the firm's first mobile application;
- address compliance questions; and
- rule changes.
- 6. What information should accompany filings of ghostwritten communications on behalf of third party vendors?
- FINRA understands that some firms file ghostwritten communications on behalf of third party vendors for review. In order to facilitate these reviews, firms should disclose to FINRA that the communications were created by a third party vendor which may market them to other firms. Firms are reminded that Regulatory Notice 08-27 provides guidance about the use of ghostwritten communications.
