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Easier to Communicate? Remember FINRA’s Communications Rules

Posted in Communications

FINRA’s sweeping overhaul of its rules governing communications with the public become effective today.  The new rules and guidance, which the SEC approved last year, are likely to keep compliance officers busy for quite some time.

The revisions simplify some rules, but also create new compliance challenges.  Most significant, FINRA reduced the number of categories of communications to three from six, and requires that member firm file certain communications previously not subject to a filing requirement.

While the JOBS Act eases restrictions on pre-offering and offering related communications, FINRA members must still consider the application of the communications rules.  For example, under the new rules, retail communications include any written (including electronic) communication that is distributed or made available to more than 25 retail investors within any 30 calendar day window.  This means most communications made through a website that is not password-protected are subject to a filing requirement.