Rule 482

On May 22, 2015, FINRA issued guidance concerning communications with the public. Here are some notable points from the guidance.

Non-promotional communications (i.e. communications that do not promote or recommend a specific product or service) do not need to be filed with FINRA
Electronic forum posts are considered retail communication, but are specifically excluded from filing requirements
Template updates do not need to be filed with FINRA if all that changed was statistical information
Various non-material changes to previously filed communications do not require refiling the communication
A reprinted article does not need to be filed with FINRA
Promotional items that only have the name of a mutual fund are not considered “advertisements” under Rule 482
If a firm includes mutual fund performance in a retail communication or correspondence, they must also include the fund’s expense ratio
Firm must file retail communications regarding registered business development companies
A Series 26 registration does not permit a principal to approve retail communications concerning a business development company. The principal must have a Series 24, Series 9/10, or Series 39 registration instead.

Sources:
Regulatory Notice 15-17: Guidance on Rules Governing Communications With the Public
FINRA Rule 2210 Questions and Answers

This alert applies to the Series 6, Series 7, Series 9/10, Series 24, Series 26, Series 39, Series 62, Series 82, and Series 99.

On March 15, 2013, the SEC issued guidance for investment companies regarding their communications over social media. Noting that investment companies have been filing certain communications unnecessarily, the SEC describes which types of communications should or should not be filed, providing examples of each.

Communications that should be filed include:

-Discussion of the specific elements of the performance of a fund

-Promotion of the performance of a fund

-Communication initiated by the issuer that talks about the merits of the fund

Communications that do not need to be filed include:

-Mention of an investment company that does not address the investment merits of the fund

-Talking about performance with no mention of any specific element of a fund’s return

-Factual introductory statements that include a link to the fund’s prospectus

-Factual responses to queries that do not address the investment merits of a fund

To see examples of what needs to be filed and what does not, check out the SEC guidance.

For further analysis of the SEC release, along with a general discussion of the intersection of regulation and social media, check out the blog post by Augie Ray at http://www.experiencetheblog.com/2013/03/regulators-to-financial-service-stop.html. Mr. Ray, an ex-Forrester analyst (source), asserts that regulators are encouraging firms to make more active use of social media, and that this guidance is part of that trend.

Source: SEC Release 2013-40: SEC Issues Guidance Update on Social Media Filings by Investment Companies

This alert applies primarily to the Series 6, Series 7, and Series 26. It may also be relevant to the Series 24, Series 62, Series 82, Series 99.

Tag: Rule 482

Exam Alert: FINRA Provides Guidance on Communications