Introduction

Welcome to Communications with the Public: the requirements that govern how a broker-dealer (BD), its registered representatives, and its registered principals create, approve, distribute, and retain every piece of marketing, sales literature, correspondence, telemarketing call, and public appearance the firm conducts with investors and the public. This unit is the content-supervision core of Function 3 on the Series 24 exam.

Exam Weight: Part of 21% (~32 questions across Function 3)

What You'll Learn

In this unit, you'll cover:

• Communication Categories: The three-bucket framework (institutional, retail, correspondence) tied to the 25-investor / 30-day test, the definition of an institutional investor ($50M-asset minimum, 100-participant employee plans, registered investment advisers), and how a single retail recipient flips an entire blast from institutional to retail
• Approval and Supervision: When a registered principal must pre-approve retail communications, the supervisory-review standard for correspondence and institutional communications under the FINRA supervisory system, and the limited approval exceptions for online interactive forums and investment-company prospectus advertising
• Filing Requirements: The 10-business-day pre-use and post-use filing windows with FINRA's Advertising Regulation Department, the one-year new-member pre-filing rule for electronic and public-media retail communications, the always-excluded categories (institutional, correspondence, tombstones, generic ads), and FINRA's spot-check authority over everything else
• Content Standards: The fair and balanced, good faith, and sound basis standards, the prohibition on misleading omissions, the strict conditions for performance projections and target return ranges, the testimonial and hyperlink-adoption rules, and how public-appearance statements must satisfy the same content rules
• Specialized Communications: Variable life insurance and variable annuity disclosure requirements, independent ranking entity requirements for investment company rankings, bond mutual fund volatility ratings, investment analysis tools, security futures, and CMO communications
• Investment Company Communications: The deemed-prospectus treatment of investment-company performance ads under the Securities Act of 1933, standardized 1-, 5-, and 10-year total-return presentation, the federal misleading-sales-literature anti-fraud factors, and how the Investment Company Act of 1940 overlays anti-fraud liability on registered fund sales literature
• Telemarketing: The 8 a.m. to 9 p.m. local time window at the called party's location, the firm-specific and national do-not-call (DNC) lists, the 31-day registry-scrubbing requirement, the 18-month / 3-month existing business relationship (EBR) exception, caller-ID disclosure, wireless and prerecorded call rules, and TCPA exposure
• Taping Rule: The disciplined-firm-hiring thresholds (40% for 5-9 reps, 25% for 10-19, 20% for 20+), the 60-day procedure deadline, the 3-year / 2-year accessible retention rule, the 30-day reduction window to terminate hires and avoid taping, and quarterly FINRA reporting
• Communications Recordkeeping: The 3-year retention rule for all communications (most recent 2 years easily accessible) under the SEC books-and-records framework, the dual records of associated person, dates of first and last use, principal approver, and reviewer, plus the Securities Investor Protection Act ban on non-SIPC firms displaying the SIPC logo
• Payments-to-Influence-Publications Prohibition: The prohibition on undisclosed paid touting that influences market price, the labeled-paid-advertising and federal touting-disclosure exceptions, and how the same conduct can trigger the communications framework, the influence-publications prohibition, and Securities Act anti-fraud liability simultaneously

Why This Matters

The Series 24 exam tests three principal-level questions on this material:

• Whether the firm correctly classifies every piece of communication into one of the three buckets and applies the right approval, supervision, and filing workflow to each
• Whether the firm's content meets the fair and balanced standard, including the strict performance-projection limits, testimonial disclosures, and product-specific rules for variable contracts, mutual funds, CMOs, security futures, and investment analysis tools
• Whether the firm's outbound contact (telemarketing) and content-touching (paid promotional posts, public appearances) are gated by the right consent, disclosure, and DNC controls before any communication leaves the firm

A firm that approves a retail communication without principal sign-off violates the approval requirement; a firm that calls a household before 8 a.m. local time violates the telemarketing requirement; a firm that pays an influencer to post about a thinly traded stock violates the influence-publications prohibition and the 1933 Act simultaneously. The exam pairs these because the rulebook does.

Let's start with the foundational classification framework that drives every other decision in this unit: the three communication categories.