FINRA Proposes Rule Changes on Retail Communications

FINRA proposed amendments that would reduce a number of the regulatory burdens associated with retail communications. The amendments would (i) reduce the filing requirements that are set forth in FINRA Rules 2210 ("Communications with the Public Exchange") and 2214 ("Requirements for the Use of Investment Analysis Tools"), and (ii) change the investment volatility content and disclosure requirements in FINRA Rule 2213 ("Requirements for the Use of Bond Mutual Fund Volatility Ratings").

Specifically, the amendments provide that:

• new FINRA member communications used in electronic or public media be filed with FINRA 10 business days after use or amendment, rather than 10 business days prior to use;

• FINRA will exempt registered investment company shareholder reports filed with the SEC from the need to be filed with FINRA;

• issuer-prepared offering documents are not required to be filed;

• ranking and comparison backup materials concerning advertisements of fund performance will have to be retained but not filed by a firm;

• generic registered investment company communications that do not promote a particular fund or fund family will not have to be filed;

• material on investment analysis tools and templates will not have to be filed;

• certain templated communications filed previously with FINRA will not have to be filed again if they have been updated only with recent statistical or other non-narrative information; and

• filing requirements associated with bond mutual fund volatility ratings will be changed from 10 days prior to use to 10 days post-use, and required content generally will be reduced.

FINRA stated that it is continuing to conduct general reviews of its communications rules.