FINRA Proposes To Exempt Market Letters From Pre-Approval Requirement

On Sept. 25, 2008, the SEC issued for comment proposals by FINRA to amend NASD Rules 2210 (Communications with the Public) and 2211 (Institutional Sales Material and Correspondence) [and Incorporated New York Stock Exchange Rule 472 (Communications with the Public)] to exempt "market letters" from FINRA's principal pre-approval requirements. Among other things, the proposals would amend the definition of "sales literature" in Rule 2210 to exclude market letters that qualify as "correspondence," and would define "correspondence" in Rule 2211 to include market letters distributed by a member to one or more of its existing retail customers and fewer than 25 prospective retail customers within any 30 calendar-day period. Rel. No. 34-58648; available at http://www.sec.gov/rules/sro/finra/2008/34-58648.pdf. Highlights of the proposals are summarized below.