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: available only to institutional investors. A mixed audience of 1 to 25 retail investors plus institutional investors is correspondence; more than 25 retail investors within 30 calendar days is retail communication.
• Retail vs. correspondence: more than 25 retail investors in any 30 calendar-day period is retail; 25 or fewer is correspondence.
• Institutional investor = a bank, insurance company, registered investment company/adviser, government entity, employee benefit plan with 100+ participants, a person with $50 million+ in assets, or a member firm; everyone else is retail.
• Public appearances (seminars, interviews, webinars) sit outside the 25/30 test, skip per-piece approval, but still follow content standards.

Approval by Category

• Retail needs pre-use approval by a registered principal, before the earlier of first use or filing, shown by signature/initials and date.
• Correspondence and institutional need only supervisory review under written procedures (WSPs), no pre-use sign-off; correspondence review is risk-based sampling, not full pre-review.
• Retail exceptions: content with no recommendation, post-use-reviewed online forum posts, and investment-company ads approved under the prospectus-advertising rule.

The One-Liners That Win Points

• Classification is audience-based, not content-based; identical content can sit in different categories.
• A Series 27/28 financial and operations principal cannot approve communications.
• A recorded webinar reaching more than 25 retail investors becomes retail, needing pre-use approval.
• New members generally pre-file public-media retail communications at least 10 business days before first use during year one; exclusions apply.
• Institutional communications and correspondence are never filed, but stay open to FINRA's spot-check authority.
• A non-SIPC broker-dealer may not advertise SIPC-like protection or show the Securities Investor Protection Corporation (SIPC) logo.

Numbers to Lock In

Content Standards (the Substance Layer)

• Every communication must be fair and balanced, rest on fair dealing and good faith, with a sound basis for evaluation.
• No false, exaggerated, unwarranted, promissory, or misleading statements, or omission of material facts.
• Performance projections are barred, except investment-analysis-tool output and disclosed target return ranges.
• Testimonials need three disclosures: typicality, a past-performance disclaimer, and compensation if more than nominal.
• A firm owns hyperlinked content only if it adopted it or became entangled with it.
• Public-appearance recommendations need a reasonable basis and 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 both FINRA and the Securities and Exchange Commission (SEC), showing standardized 1/5/10-year returns plus the "objectives, risks, charges, and expenses" advisory.
• Sales-literature anti-fraud rules add federal charging routes beyond FINRA content standards.
• Anti-touting prohibition: no giving value to influence or reward published content meant to move a security's price. Exceptions: content clearly distinguishable as paid advertising, content disclosed under the federal touting-disclosure provision (receipt and amount), and research reports as the research-analyst rule defines them.

Top Gotchas

• Correspondence vs. retail hinges on 25 versus 26 in 30 days: 25 stays correspondence, 26 becomes retail with full approval/filing.
• Pre-use vs. post-use: a plain mutual fund ad files within 10 business days after use (post-use); a self-created ranking flips it to at least 10 business days before use (pre-use).
• An existing business relationship exempts a call from the national DNC registry, never from the firm-specific list.
• The 31-day scrub-copy window is not the 30-day honor period; keep them separate.
• The Taping Rule triggers only from hiring out of expelled or registration-revoked firms; once triggered, it tapes all registered persons, not just them.

One-Breath Recap

Classify by the 25-retail/30-day count: institutional-only is institutional, 25 or fewer retail is correspondence, over 25 is retail. Retail needs pre-use principal approval; correspondence and institutional need supervisory review, unfiled. Routine filings use 10 business days: after first use for listed products; before first use for self-created rankings, security futures, and first-year members' public-media retail ads, subject to exclusions. Bond fund volatility ratings stay post-use. Content must be fair, balanced, not misleading; fund ads show standardized 1/5/10-year returns and the prospectus advisory. Telemarketing runs 8 a.m.-9 p.m. where called, with two DNC layers. Concentrated disciplined-firm hires trigger taping; records run 3 years, 6 for accounts; anti-touting bars paying to move a security's price through published content.

Need more than the recap? Read the full Communications with the Public unit.