Quick Answer
Written and electronic messages sort by audience: retail (more than 25 retail investors in 30 days), institutional (institutional investors only), and correspondence (25 or fewer retail investors). Retail communications need principal pre-approval; some also get filed with the Financial Industry Regulatory Authority (FINRA). Products like options, municipals, variable contracts, and research carry their own disclosure rules.
The whole unit on one sheet: classify by audience, know who approves and files, and nail the product-specific disclosure lines the exam loves.
What Are the Communication Categories?
- 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 review 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, television). Supervised, not pre-approved.
Which One-Liners Win Points?
- Institutional investor = a bank, insurance company, registered investment company, registered investment adviser, government entity, FINRA member, or anyone with $50 million in total assets. A high-net-worth individual with $50 million qualifies.
- Scripted seminar to more than 25 retail investors = retail communication (pre-approval). Unscripted talking = public appearance.
- At a 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.
- Content standards (fair, balanced, good faith, no performance predictions) apply to all categories, including public appearances.
- A bond fund volatility rating is never a "risk" rating.
- Options Disclosure Document (ODD) delivery is triggered by account approval for options trading, not the first trade; electronic delivery counts only with notice, access, and evidence of delivery.
Which Numbers Matter Most?
| 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 (listed product categories) | within 10 business days of first use |
| Unusual fund ranking or security futures piece, any member | 10 business days BEFORE first use |
| Pre-ODD options communication filing | 10 calendar days before use |
| Full prospectus after investor request | 3 business days |
| Standardized fund performance periods | 1, 5, and 10 years |
| IPO research quiet period | 10 days (syndicate managers and members) |
| Secondary offering quiet period | 3 days (managers and co-managers); none for other members |
Which Gotchas Trip Students Up?
- The 25 count is a rolling 30-day total, not per mailing: an email to 26 retail customers over 30 days is a retail communication even if sent one at a time. Internal communications are excluded from all three categories.
- Count only retail recipients in a mixed audience. A written piece sent to 1 retail investor and 30 institutional investors is correspondence, assuming no additional retail distribution within 30 calendar days. One retail recipient prevents institutional-only treatment; it does not exceed the 25-retail-investor threshold.
- Institutional communications need written review procedures, not pre-approval. Know "pre-approval required" (retail) versus "review procedures required" (institutional).
- New members file BEFORE use (10 business days ahead); established members file listed product pieces AFTER use (within 10 business days), but an unusual fund ranking goes BEFORE use. Pre-ODD options filing is 10 calendar days, easy to confuse with the business-day rule.
- The mutual-fund-advertising rule is not a safe harbor from anti-fraud liability; performance must use standardized 1, 5, and 10-year periods (no cherry-picked windows).
- Variable annuity guarantees depend on the insurer's claims-paying ability, not the separate account. Never imply the product is short-term or liquid, and never overemphasize a guarantee.
- Full name "Collateralized Mortgage Obligation" must appear in CMO retail communications and correspondence; "CMO" alone is not enough. Educational material must be offered (not delivered) to non-institutional investors.
- Pre-ODD options materials cannot name specific securities, recommend, or show performance. Independent third-party research on a member website or upon request escapes the material-conflict disclosure duty. Independent status separately excuses content review and principal preapproval under any delivery method; labeling and the objectivity-and-reliability restriction remain. Selective distribution of research is prohibited: all entitled clients get it at substantially the same time.
One-Breath Recap
Classify written pieces by audience over 30 calendar days: institutional-only is institutional, 1 to 25 retail investors is correspondence, and more than 25 retail investors is retail communication. Count only retail recipients: 1 retail plus 30 institutional investors is correspondence. Unscripted talk is a public appearance. Know principal approval and FINRA filing requirements, keep content fair and balanced, and apply the product-specific disclosures for options, municipals, variable contracts, and research.
Need more than the recap? Read the full Public Communications and Advertising unit.