FINRA Amends Its Proposal to Allow Projected Performance in Communications

FINRA amended its proposal to let brokers show projected performance and targeted returns in communications with the public. The SEC published the revised proposal and is taking comments through July 28, 2026 (see prior coverage).

FINRA Rule 2210 (Communications with the Public) generally bars broker-dealers from projecting investment performance in public communications. FINRA's proposal would create an exception allowing firms to show, under strict conditions, projected performance and targeted returns.

The amendment makes three changes to the initial proposal. First, the amendment adds a recordkeeping requirement: firms would be required to keep records showing the source of any projection or targeted return. Second, the amendment removes an explicit "reasonable basis" clause. FINRA said the clause is unnecessary because existing rules already bar unreasonable claims. Third, the amendment removes two disclosure clauses: one would have required firms to state whether a projection is net of fees and expenses and the other would have required them to explain why actual performance might differ. FINRA said existing standards already give investors enough information to understand the risks and limits of projections.