FINRA’s proposal would expand investor access to performance projections and targeted returns to more closely align FINRA Rule 2210 with the IA Marketing Rule

The Financial Industry Regulatory Authority, Inc. (“FINRA”) recently filed with the U.S. Securities and Exchange Commission proposed amendments (the “Proposed Amendments”) to FINRA Rule 2210 (Communications with the Public) to permit a member, when certain conditions are met, to include certain projections or provide a targeted return with respect to a security, a securities portfolio, or an asset allocation or other investment strategy in its communications. The conditions are intended to help ensure that such projected performance or targeted returns have a reasonable basis, are accompanied by certain disclosures, and that members sharing such information have written policies and procedures reasonably designed to ensure the communications are relevant to the likely financial situation and investment objectives of their audience.

We provide an overview of the Proposed Amendments and related guidance in the Proposing Release.