Legal Alerts

FINRA Offers Q&A for New Communication Rules


On February 4, 2013, FINRA’s new rules regarding Communications With The Public will go into effect. The “Communication Rules,” as they’ve been dubbed, are an extensive reworking of the approval, filing and content requirements regarding certain categories of communication. The Communication Rules will adopt NASD Rules 2210 and 2211 and NASD Interpretive Materials 2210-1 and 2210-3 through 2210-8 as FINRA Rules 2210 and 2212 through 2216. The Communication Rules will also delete certain provisions of Incorporated NYSE Rule 472 and certain Supplementary Material and Rule Interpretations related to NYSE Rule 472.

Theoretically, the Communication Rules will streamline the application of the relevant communication procedures and standards, reducing the various communication categories from six down to three:

  • Institutional communication includes written (including electronic) communications that are distributed or made available only to institutional investors, but does not include a firm’s internal communications. “Institutional investor” generally has the same definition as under NASD Rule 2211(a)(3).
  • Retail communication includes any written (including electronic) communication that is distributed or made available to more than 25 retail investors within any 30 calendar-day period. “Retail investor” includes any person other than an institutional investor, regardless of whether the person has an account with the firm.
  • Correspondence includes any written (including electronic) communication that is distributed or made available to 25 or fewer retail investors within any 30 calendar-day period.

Additionally, the Communication Rules set forth revised requirements for filing communications with FINRA, updated record keeping requirements, and modified content standards. Not surprisingly, since the June 2012 announcement in Regulatory Notice 12-29, FINRA has been flooded with questions regarding the new Rules. Accordingly, FINRA recently published a set of questions and answers on its website regarding the Communication Rules.

While the new Communication Rules are highly technical and detailed, it is FINRA’s hope that these responses will aid broker-dealers in the transition.

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