Study guide
This chapter opens Function 1 of the official FINRA Series 6 content outline, Seeks Business for the Broker-Dealer, which together with Chapter 2's prospecting material supplies roughly 12 of the exam's 50 scored questions. Here the focus is narrower: how FINRA Rule 2210 classifies communications, what must be filed with FINRA and when, and how SEC rules govern the presentation of fund and variable-product performance. Nearly every question in this chapter traces back to a specific rule citation, so precision with numbers and definitions pays off directly.
The Three Rule 2210 Communication Categories
FINRA Rule 2210 sorts every communication into retail communication (>25 retail investors/30 days, needs prior principal approval), correspondence (25 or fewer), and institutional communication (institutional investors only). Content standard: fair, balanced, not misleading.
Principal Approval and FINRA Filing Deadlines
Approval (internal, before use) and FINRA filing are separate. First-year member firms file 10 business days before use; established firms file investment company retail communications within 10 business days after use.
SEC Rule 482: The Omitting Prospectus and Performance Standards
A Rule 482 ad is a deemed prospectus that may show standardized 1/5/10-year average annual total returns current to the most recent quarter-end, net of maximum sales load, with required legends.
Variable Product and Seminar Communication Standards
Variable products can't be called mutual funds; tax-deferred must not be called tax-free; death benefit guarantees don't prevent account value decline. Seminar decks to >25 retail investors need prior principal approval.
Generic Advertising and Other Fund Communication Formats
Rule 135a generic ads name no specific fund and show no performance; Rule 498 summary prospectus is a delivery format; Rule 482 applies once a specific fund and performance are shown.
Key terms
- Retail communication
- — Any written or electronic communication to more than 25 retail investors within 30 calendar days; needs prior principal approval.
- Correspondence
- — Communication to 25 or fewer retail investors within 30 days; supervised but not pre-approved.
- Institutional communication
- — Communication distributed only to institutional investors.
- Registered principal
- — Supervisor who must approve retail communications before first use.
- Omitting prospectus (Rule 482)
- — A fund ad deemed a prospectus that may show standardized performance but omits most prospectus detail.
- Summary prospectus (Rule 498)
- — Short-form prospectus permitted when the full prospectus is available online and on request.
- Generic advertising (Rule 135a)
- — Advertising promoting funds as a concept without naming a specific fund.
- Standardized performance
- — 1/5/10-year average annual total returns current to the most recent quarter end.
- Statement of Additional Information (SAI)
- — Supplemental fund disclosure document provided free on request.
- Fair and balanced standard
- — Core Rule 2210 requirement barring misleading, promissory, or exaggerated claims.
Exam tips
- Existing customers count toward the 25-investor threshold; the 30-day window is rolling.
- Approval is always before use; filing timing depends on firm tenure (before for new firms, after for established).
- Performance quotes must be standardized and net of max sales load; fiscal year-end figures aren't current enough.
- Watch for tax-deferred vs tax-free confusion in variable annuity seminar content.
- Rule 482 triggers once a specific fund + performance appear; Rule 135a is for unnamed, performance-free ads.
- Seminar slide decks to large audiences are retail communications needing prior approval.