Series 7: 11.1.2 Filing Requirements And Review Procedures

11.1.2  Filing Requirements and Review Procedures

Retail communications about registered investment companies must be filed with FINRA’s Advertising Regulation Department within ten business days of their first use. In most cases, research reports about investment companies are exempt from this requirement. Recall that an investment company pools investors’ money (into a mutual fund, a variable annuity, or a face-amount certificate, for example) and trades that money on their behalf. Advertisements involving direct participation programs or collateralized mortgage obligations must also be filed with FINRA under the 10-day deadline.

Some retail communications demand more stringent oversight, requiring that they be filed 10 business days prior to their first application and withheld from publication until receiving FINRA approval. These are retail communications that concern:

• • Bond mutual funds that incorporate volatility ratings
• • Investment companies that include performance ratings or rankings with other investment companies
• • Security futures and options
• • Any retail communication from a FINRA member firm in its first year of operation (as measured from the date its FINRA membership became effective)

All filings to FINRA must include the actual or anticipated date of first use, the name and title of the principal who approved the retail communication, and the date that the approval was given.

In addition, any member firm that has never previously filed advertisements with FINRA must file its initial advertisement at least 10 business days prior to use and continue to do so for the succeeding year.

Institutional