Communication and Documentation Flashcards

Under FINRA Rule 2210, which category of communication requires prior principal approval before use?

Answer: Retail communication

Retail communication must be approved by a registered principal before first use, as it reaches more than 25 retail investors in a 30-day period.

A broker-dealer sends a promotional email to 30 retail investors. Under FINRA Rule 2210, this is classified as:

Answer: Retail communication

Any written communication distributed or made available to more than 25 retail investors within any 30-day period is classified as retail communication.

Which FINRA rule specifically governs the supervision and review of correspondence and internal communications?

Answer: FINRA Rule 3110

FINRA Rule 3110 requires firms to establish and maintain supervisory systems, including review of correspondence and internal communications.

When a registered representative wants to post on a personal social media page about their firm's investment products, FINRA generally treats this as:

Answer: A form of public communication subject to firm supervision

Social media posts by registered representatives about firm products are considered public communications subject to FINRA content standards and supervisory review.

Under FINRA rules, a testimonial used in retail communication must include which disclosure?

Answer: A statement that the testimonial may not be representative of other clients' experiences

Testimonials must be accompanied by a disclosure that the experience described may not be representative of other clients' experiences.

A firm uses a third-party content provider to create retail communications. Under FINRA rules, responsibility for compliance with communication standards rests with:

Answer: The firm itself, even when using third-party content

The member firm retains responsibility for the content of retail communications regardless of whether a third party created the material.

Under FINRA Rule 2210, which statement about hypothetical performance results in retail communication is accurate?

Answer: They may be used if accompanied by required disclosures about assumptions and limitations

Hypothetical performance results may be presented in retail communications if accompanied by appropriate disclosures about the assumptions, limitations, and speculative nature of the results.