Communications with the Public

The whole unit on one sheet: classification, approval, filing, content standards, investment company overlays, telemarketing, taping, records, and anti-touting.

The Three Categories (the Classification Engine)

• Institutional communication: written communication made available only to institutional investors. A single retail recipient flips it to retail.
• Retail communication: made available to more than 25 retail investors in any 30 calendar-day period.
• Correspondence: made available to 25 or fewer retail investors in any 30 calendar-day period.
• Institutional investor = bank, insurance company, registered investment company, registered investment adviser, government entity, employee benefit plan with at least 100 participants, or a person with total assets of at least $50 million, or a member firm. Everyone else is retail.
• Public appearances (seminars, interviews, webinars) are a separate track: not counted in the 25/30 test, no per-piece approval, but still subject to content standards.

Approval by Category

• Retail: pre-use approval by a registered principal before the earlier of first use or filing, evidenced by signature or initials and date.
• Correspondence and institutional: supervisory review under written supervisory procedures (WSPs), no pre-use sign-off. Correspondence review is risk-based sampling, not 100% pre-review.
• Approval exceptions (retail): excepted-from-filing content with no recommendation, online interactive forum posts (post-use review), and investment-company ads already approved under the prospectus-advertising rule.

The One-Liners That Win Points

• The threshold is strictly more than 25: 26 retail recipients = retail; exactly 25 = correspondence.
• Same content, different category at different firms: classification is audience-based, not content-based.
• A Series 27 or 28 financial and operations principal cannot approve communications.
• A recorded webinar redistributed to more than 25 retail investors becomes a retail communication requiring pre-use approval.
• New member firms must pre-file every retail communication in electronic or public media for one year from FINRA membership effectiveness.
• Institutional communications and correspondence are never filed, but both remain subject to FINRA's spot-check authority.
• A non-SIPC broker-dealer may not advertise SIPC-like protection or display the Securities Investor Protection Corporation (SIPC) logo.

Numbers to Lock In

Content Standards (the Substance Layer)

• Every communication, any category, must rest on fair dealing and good faith, be fair and balanced, and give a sound basis for evaluation.
• No false, exaggerated, unwarranted, promissory, or misleading statements; no omission of material facts.
• Performance projections are prohibited; narrow exceptions for investment-analysis-tool output and disclosed target return ranges.
• Testimonials need three disclosures: typicality, past-performance disclaimer, and compensation if more than nominal.
• A firm owns hyperlinked content only if it adopted or became entangled with it.
• Public-appearance recommendations require a reasonable basis plus disclosure of firm and representative interest.

Investment Company and Anti-Touting Overlays

• Prospectus-advertising rule: a qualifying fund ad is a deemed prospectus, filed with the Securities and Exchange Commission (SEC) not FINRA, and must show standardized 1/5/10-year returns plus the "objectives, risks, charges, and expenses" advisory.
• Sales-literature anti-fraud rules add federal charging routes on top of the FINRA content standards.
• Anti-touting prohibition: no giving anything of value to influence or reward published content intended to affect a security's market price. Exceptions: clearly labeled paid advertising, content disclosed under the federal touting-disclosure provision (receipt AND amount), and compliant research reports.

Top Gotchas

• Correspondence vs retail turns on exactly 25 versus 26 retail recipients in 30 days: 25 is correspondence, 26 is retail with full approval and filing.
• Pre-use vs post-use filing: a plain mutual fund retail ad files within 10 business days of first use (post-use); add a self-created performance ranking and it flips to at least 10 business days before first use (pre-use).
• An existing business relationship exempts a call from the national DNC registry, but never from the firm-specific DNC list.
• The 31-day registry-scrub copy is not the 30-day DNC honor period; keep them separate.
• The Taping Rule triggers only from hiring out of expelled or registration-revoked firms, and once triggered it tapes all registered persons, not just the disciplined-firm hires.
• Communications retention is 3 years; customer-account records are 6 years.

One-Breath Recap

Sort every communication by the 25-retail / 30-day count: only-institutional is institutional, 25 or fewer retail is correspondence, more than 25 retail is retail. Retail needs pre-use principal approval; correspondence and institutional need supervisory review under written procedures; institutional and correspondence are never filed while most retail filings run within 10 business days of first use (self-created rankings, bond fund volatility ratings, and security futures flip to 10 business days pre-use, and new members pre-file for one year). Content must be fair, balanced, and not misleading across all categories, with fund ads carrying standardized 1/5/10-year returns and the prospectus advisory. Telemarketing runs 8 a.m. to 9 p.m. at the called party's location with two DNC layers, the Taping Rule fires on concentrated disciplined-firm hires, records are kept 3 years against 6 for account records, and the anti-touting prohibition bars paying to move a security's price through published content.

Need more than the recap? This is a condensed summary. If it is not enough, read the full Communications with the Public unit for the complete lesson.