On November 3, 2023, the Financial Industry Regulatory Authority (FINRA) filed a proposed rule change with the Securities and Exchange Commission. This action intends to revise FINRA Rule 2210 and has potential implications for broker-dealers. Notably, the amendment could enable a broker-dealer to project performance or provide a targeted return concerning a security, asset allocation, or alternative investment strategy in a communication exclusively disseminated to qualified purchasers. Katten Muchin Rosenman LLP reports on these proposed changes to the advertising rule.
This proposal by FINRA comes as a potential paradigm shift in the industry’s communication norms. If accepted, we could see a seismic change in the type of information broker-dealers can provide to qualified purchasers, potentially altering the kind of conversations these industry professionals have about performance projections and targeted returns. Professionals in the field will need to remain vigilant about these impending changes to adapt their practices accordingly.
It’s important to note that these proposed modifications are currently under review by the Securities and Exchange Commission, which has the final say in approvals. Industry professionals will be keen to keep an eye out for impending updates on the status of this proposal. Remember to maintain a regular check on legal updates affecting the advertising rules. These can have significant implications on professional practices and may lead to substantial shifts in how financial professionals communicate with their clients.
In conclusion, this proposal represents another move in FINRA’s ongoing aim to modernize its regulations in line with the ever-evolutionary financial industry. It’s a reminder of the importance of staying tuned to regulatory changes within the legal-verticals within finance.