Letter of Intent (LOI) Duration and Backdating Rules
Under FINRA rules, what is the maximum duration of a mutual fund Letter of Intent (LOI), and for how many calendar days may it be backdated?
A Letter of Intent (LOI) gives an investor 13 MONTHS to reach a breakpoint threshold. The investor may backdate the LOI up to 90 CALENDAR DAYS to include prior purchases within that window.
Complete Analysis & Legal Rationale
The 13-month total window includes the 90-day backdated period. If the investor fails to deposit the committed funds, the fund liquidates escrowed shares to cover the higher sales load.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
13 months duration, 90 days backdating permitted under FINRA rules.
12 months is incorrect; FINRA specifies 13 months.
24 months is non-standard.
6 months is too short.
Official Standard: Establishes 13-month duration and 90-day backdating parameters.