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Question (Relevant to the Series 7, Series 24, Series 26, Series 62, and Series 82):
FINRA considers institutional communications to be written communications sent solely to institutional investors. FINRA considers an “institutional investor“ to be any of the following except:
Answers:
A. An individual with total assets of $55 million
B. An insurance company
C. A corporation with net assets of $20 million
D. A qualified plan that has 100 participants
Correct Answer: C
Rationale: Institutional communications are written communications sent to institutional investors. FINRA Rule 2210, Communication with the Public, defines “institutional investor“ as any of the following:
(A) a bank,savings and loan association, insurance company, or registered investment company;
(B) an investment adviser registered either with the Securities and Exchange Commission under Section 203 of the Investment Advisers Act of 1940 or with a state securities commission (or any agency or office performing like functions);
(C) any other entity (whether a natural person, corporation, partnership, trust, or otherwise) with total assets of at least $50 million;
(D) governmental entity or subdivision thereof;
(E) employee benefit plan, or multiple employee benefit plans offered to employees of the same employer, that meet the requirements of Section 403(b) or Section 457 of the Internal Revenue Code and in the aggregate have at least 100 participants, but does not include any participant of such plans;
(F) qualified plan, as defined in the Exchange Act, or multiple qualified plans offered to employees of the same employer,that in the aggregate have at least 100 participants, but does not include any participant of such plans;
(G) member or registered person of such a member; and
(H) person acting solely on behalf of any such institutional investor.
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