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ARTICLE · 23 NOVEMBER 2023

FINRA Acts To Update Its Advertising Rule

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The Financial Industry Regulatory Authority filed a proposed rule change with the Securities and Exchange Commission on November 3, 2023, to amend FINRA Rule 2210.

United StatesMedia, Telecoms, IT, Entertainment
Susan Light
Susan Light
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The Financial Industry Regulatory Authority filed a proposed rule change with the Securities and Exchange Commission on November 3, 2023, to amend FINRA Rule 2210. This amendment would allow a broker-dealer to project performance or provide a targeted return with respect to a security, asset allocation or other investment strategy in a communication distributed solely to qualified purchasers.

FINRA's current prohibition against performance projections is intended to protect investors who may lack the capacity to understand the risks of projected performance in making investment decisions but allows certain tools, such as hypothetical illustrations or price targets with valuation methods.

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