Exam Alert: FINRA provides guidance on TIPS fund advertising
On October 27, 2011, FINRA provided guidance on its rules that govern communications with the public regarding Treasury Inflation-Protected Securities (TIPS) funds. Specifically, if a TIPS fund's current yield is adjusted monthly based on changes in the inflation rate, communication must explain that these changes can cause the yield to vary greatly from month to month. If an advertisement includes an unusually high current yield, "the material must disclose that the yield is attributable to the rise in the inflation rate, which might not be repeated."
Source: FINRA Regulatory Notice 11-49
This alert is relevant to the Series 6, 7, 24, 26, 62, and 82.
Exam Alert: FINRA provides guidance on the use of FINRA in firm trademarks
On October 27, 2011, FINRA provided guidance on its rules that govern communications with the public regarding indicating FINRA membership. Specifically, FINRA stated that firms and associated persons may not use FINRA's trademark in the firm's or individual's trademark. The firm's or individual's trademark also must not include references to FINRA membership.
Source: FINRA Regulatory Notice 11-49
This alert is relevant to the Series 6, 7, 24, 26, 62, and 82.
Exam Alert: FINRA provides guidance on ETF and DPP advertising
On October 27, 2011, FINRA provided guidance on its rules that govern communications with the public regarding exchange-traded products. Specifically, FINRA reminded firms that research reports on exchange-traded funds (ETFs) must filed with FINRA within ten days of first use. FINRA also reminded firms that firms must file sales literature for direct participation programs (DPPs).
Source: FINRA Regulatory Notice 11-49
This alert is relevant to the Series 6, 7, 24, 26, 62, and 82.
Exam Alert: NASAA develops list of “Best Practices”
A 2010 NASAA review of broker-dealers found that the three most common compliance problem areas were failure to follow supervisory policy, advertising and sales literature, and suitability issues. NASAA developed a list of ten best practices and released them in October of 2010. The recommendations focus on suitability, exception reports, supervisory procedures, and communications. Relevant to Series 6, Series 7, Series 63, Series 65, Series 66, Series 24, Series 26, Series 62 and Series 79. The list can be found here: http://www.nasaa.org/NASAA_Newsroom/Current_NASAA_Headlines/13382.cfm.