Communications with the Public
Everything a broker-dealer says to the public (advertisements, emails, social media posts, research reports, even seminar presentations) falls under FINRA Rule 2210. This rule categorizes all firm communications and sets standards for content and approval.
The Three Categories (FINRA Rule 2210)
FINRA divides all firm communications into three categories based on the audience and number of recipients:
| Category | Definition | Approval Requirement |
|---|---|---|
| Retail communication | Distributed to more than 25 retail investors within a 30-day period | Must be approved by a principal before first use |
| Correspondence | Distributed to 25 or fewer retail investors within a 30-day period | Subject to supervision; firm sets its own review procedures |
| Institutional communication | Sent exclusively to institutional investors | No pre-use principal approval required (but must be supervised) |
Exam Tip: Gotchas
- The magic number is 25. More than 25 retail investors = retail communication (highest scrutiny, requires principal pre-approval). At or below 25 = correspondence (firm-level supervision). The threshold is measured within a 30-calendar-day period.
- The 30-day window is cumulative: sending the same email to 13 retail investors on Day 1 and 13 more on Day 15 means you have reached 26. That is a retail communication, not correspondence.
Content Standards
All communications, regardless of category, must meet these standards:
- Must be fair and balanced; cannot be misleading
- Must present risks alongside potential benefits (no cherry-picking the upside)
- Cannot predict or project performance (limited exceptions for bonds)
- Cannot make exaggerated, unwarranted, or misleading claims
- Retail communications must clearly identify the firm
Think of it this way: The content rules are the same across all three categories. What changes is the level of approval required before use. Even a message to a single institutional client must still be fair and balanced.
Exam Tip: Gotchas
- Institutional communications still require supervision. "No pre-use principal approval" does not mean "no oversight." The firm must still have procedures to review them.
- All three categories share the same content standards. The difference is in the approval process, not in what you can say.
Public Appearances
Seminars, webinars, radio interviews, and live presentations are classified as public appearances. They follow the same content standards as written communications but have separate supervisory requirements:
- No pre-use principal approval is required for scripts or slides
- The firm must still supervise the content and train the presenter
- If a recording is later distributed to more than 25 retail investors, it becomes a retail communication and requires principal approval
FINRA Filing Requirements
FINRA can require firms to file certain communications with FINRA's Advertising Regulation Department:
- New member firms must file retail communications for their first year of membership
- Options communications must be filed with FINRA at least 10 business days before first use (or within 10 business days of first use, depending on the type)
- FINRA may also require filing of specific types of communications on an ongoing basis
Exam Tip: Gotchas
- New firms file everything; established firms generally do not. The first-year filing requirement is a common test point.
- Options communications have their own filing rules separate from the general retail communication requirements.