12.3 Communications with the Public (FINRA Rule 2210)
FINRA Rule 2210 categorizes communications based on recipient count and audience sophistication to ensure all public statements are fair, balanced, and not misleading.
Key FINRA Exam Takeaways
- Correspondence: Written/electronic communication sent to 25 or FEWER retail investors within any 30-day calendar period. Post-review by registered principal permitted.
- Retail Communication: Written/electronic communication sent to MORE THAN 25 retail investors within any 30-day period. Requires PRE-APPROVAL by a Registered Principal before distribution.
- Institutional Communication: Distributed solely to institutional investors (banks, insurance companies, BDs, mutual funds). No principal pre-approval required; post-review allowed.
- Public Appearances: Seminar speeches, radio interviews, and TV appearances require principal supervisory procedures.
- Firms in their first year of FINRA membership must file all retail communications with FINRA Advertising Regulation at least 10 business days PRIOR to first use.
| Category | Recipients | Principal Approval Requirement | Filing Requirements |
|---|---|---|---|
| Correspondence | 25 or fewer retail investors in 30 days | Pre- or post-review by principal permitted | Subject to internal review only |
| Retail Communication | > 25 retail investors in 30 days | Mandatory PRE-APPROVAL by registered principal | New firms file 10 days prior; existing file within 10 days of first use |
| Institutional Communication | Institutional investors only | Post-review by principal permitted | Subject to internal review only |
Knowledge Checkpoint • Section 12.3
A registered representative drafts a market commentary newsletter and emails it to 30 existing retail clients. Under FINRA Rule 2210, how is this communication classified and what supervisory action is required?