Quick Answer
Every written or electronic message sorts into three categories by audience: retail (more than 25 retail investors in 30 days), institutional (only institutional investors), and correspondence (25 or fewer retail investors). Retail communications need principal pre-approval; some also get filed with FINRA. Content must be fair, balanced, and never call a tax-deferred product tax-free.
The whole unit on one sheet: how to classify a communication, who approves it, what gets filed, and the content lines the exam loves.
Classify First: The Three Categories (Plus One)
- Retail communication: available to more than 25 retail investors in any rolling 30 calendar-day period. Needs principal pre-approval before the earlier of use or filing.
- Institutional communication: available only to institutional investors. No pre-approval, but written supervisory procedures required.
- Correspondence: 25 or fewer retail investors in 30 days. No pre-approval; supervise and review.
- Public appearance: a separate bucket for unscripted speaking (seminars, radio, TV). Supervised, not pre-approved.
The One-Liners That Win Points
- Institutional investor = a bank, insurance company, registered investment company, registered investment adviser, or anyone with $50 million in total assets. One retail recipient anywhere kills institutional treatment.
- Scripted seminar to more than 25 retail investors = retail communication (pre-approval). Unscripted talking = public appearance.
- At any seminar, the spoken word may be a public appearance, but the handouts and slides are retail communications if more than 25 retail investors attend.
- Principal pre-approval and FINRA filing are two different obligations. Every retail piece needs pre-approval; only some also get filed.
- Tax-deferred is not tax-free. Calling a variable annuity "tax-free" is a violation.
- A volatility rating is never a "risk" rating.
- Records run 3 years from LAST use, not first use.
Numbers to Lock In
| Item | Value |
|---|---|
| Retail vs. correspondence line | more than 25 retail investors / 30 calendar days |
| Institutional investor asset threshold | $50 million total assets |
| New member firm filing | 10 business days BEFORE first use |
| Established member filing | within 10 business days of first use |
| Recordkeeping | 3 years from last use (first 2 readily accessible) |
| Deferred variable annuity principal review | 7 business days from OSJ receipt of a complete application |
| Prior variable annuity exchange look-back | 36 months |
| Standardized fund performance periods | 1, 5, and 10 years |
Filing With FINRA (Advertising Regulation Department)
- New member firm (first year): file broadly used retail communications 10 business days before first use.
- Established firms file within 10 business days of first use when a retail piece covers registered investment companies (mutual funds, ETFs, closed-end funds), variable products, fund rankings, or bond fund volatility ratings.
- Everything else that is a retail communication still needs principal pre-approval, just no filing.
Content Standards
- Fair, balanced, good faith; identify the firm; no false, exaggerated, promissory, or misleading claims; no performance predictions.
- Retail pieces must label hypothetical or back-tested returns as such and disclose paid testimonials.
- Municipal bond interest is federally tax-exempt but may be state-taxable for out-of-state investors: "tax-free" alone can mislead.
Top Gotchas
- The 25 count is a rolling 30-day total across mailings, not a per-mailing count. The same piece to 20 people Monday and 10 more Wednesday is a retail communication.
- Rankings must use an independent Ranking Entity and show 1/5/10-year periods by fund age; no ranking period under one year unless it is yield-based; never claim "best" unless actually ranked first.
- 529 plan ads need the out-of-state home-state-benefits disclosure unless distributed solely to residents of the sponsoring state.
- The deferred variable annuity 7-business-day clock starts when the Office of Supervisory Jurisdiction receives a complete and correct application, not when the customer signs. An incomplete application never starts it.
- Internal communications are excluded from all three categories entirely.
One-Breath Recap
Classify by audience first (more than 25 retail is a retail communication, institutional-only is institutional, 25 or fewer is correspondence, unscripted talk is a public appearance), pre-approve and sometimes file the retail pieces, keep everything fair and balanced, and never let tax-deferred masquerade as tax-free. Nail the numbers and the classification and this unit answers itself.
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.