Communications

FINRA’s rules recognize three types of communication with the public: correspondence, retail communications, and institutional communications. There is also a fourth kind of communication that is not with the public: internal communications, which are sent within a broker-dealer, or similar institution, to its own employees and associated persons, and are not designed to be seen by investors.

Correspondence and retail communications are the two categories the exam most often tries to mix up, since both involve communicating with regular retail investors - the difference comes down to how many people receive the communication within a 30-calendar-day period.

Institutional communications

Institutional communications are written communications sent only to institutional investors - banks, insurance companies, governmental bodies, and similar corporate entities. This does not include accredited investors: they are high-net-worth retail clients, not institutions. If the firm has reason to believe a communication will be passed along to retail clients, it can’t be treated as an institutional communication in the first place; it has to be handled as a retail communication from the start.

Correspondence

Correspondence is written communications distributed or made available to 25 or fewer retail investors in a 30-calendar-day period. A retail investor is anyone other than an institutional investor, whether or not they have an account with the firm. You want to make sure you recognize that lots of phrases mean the same thing. At most 25, 25 or less, less than 26, all mean the same thing. Correspondence does not need a principal’s pre-approval the way retail communications do; instead, it is reviewed under the firm’s written supervisory procedures.

Firms must have written procedures for reviewing correspondence, and must train employees on them. Under these procedures, incoming and outgoing correspondence - including email - is typically reviewed before it reaches the representative or goes out to the public, though the exact method is left to the firm’s own written supervisory procedures. The person reviewing correspondence must be a registered principal, who can delegate parts of the review to unregistered staff but stays responsible. Firms also keep copies of correspondence for as long as the rules require.

Approval timing: A principal must approve a retail communication in writing before its first use or filing with FINRA, whichever comes first. Correspondence and institutional communications are instead reviewed under the firm’s written supervisory procedures, and certain retail communications must be filed with FINRA within 10 business days of first use (FINRA Rule 2210).

Retail communications

Retail communications are written communications distributed or made available to more than 25 retail investors in a 30-calendar-day period. Likewise, at least 26, 26 or more, and more than 25 all mean the same thing.

If you’re trying to determine whether something counts as correspondence or a retail communication, ask yourself: will more than 25 people see it in a 30-calendar-day period? A billboard, for example, is seen by far more than 25 people in a 30-day period, so it’s a retail communication.

Some retail communications don’t have to be filed with FINRA. They are still retail communications, so the content rules still apply; they are just excluded from the filing requirement. The broadest exclusion covers communications that don’t make any financial or investment recommendation and don’t promote a product or service of the firm. Communications excluded from filing include:

• Retail communications already filed and used again without material change, or based on a filed template and updated only with newer statistics.
• Advertisements regarding recruitment. They must accurately describe the position.
• Communications related to the broker dealer changing their name, or their primary mailing address, personal address, or email, change of ownership information, business structure offices, and things like that.
• Notifications and messages related to mergers or acquisitions involving another member firm.
• Communications that do no more than identify the firm’s own exchange symbol or a security the firm is a registered market maker in, or that do no more than identify the firm or offer a specific security at a stated price.
• Interactive forum communications are not filed as communications, although they are monitored.
• Prospectuses, mutual fund profiles, and similar documents already filed with the SEC don’t need to be filed again with FINRA, and neither do tombstone-style announcements.
• Media press releases not disseminated to retail investors by the firm.
• Reprints of articles or reports issued by a publisher, provided that publisher is not affiliated with the firm or with an underwriter or issuer of a security mentioned, none of them commissioned the article, and the firm has not materially altered it.
• Communications that mention types of investments only as part of a list of the products and services the firm offers.

All retail communications and correspondence must prominently show the firm’s name, or the name its Form BD gives for its broker-dealer business. If there is a DBA, Doing Business As, or some other fictitious name that is commonly used, that may also be included.

All communications with the public, across all three categories, must also be fair and balanced: they may not make false, exaggerated, or misleading claims, promise or guarantee specific results, or predict or project future performance (FINRA Rule 2210).

What brings a communication under these rules is its content: they cover business communications, the ones that relate to the firm’s business. Something a representative says or writes on an unrelated personal topic, such as a hobby, is a personal communication, so it isn’t approved, filed, or kept as a firm record (FINRA Regulatory Notices 11-39 and 17-18).

Digital messages

Emails, text messages, and similar systems fit these same categories. Did you send the message, through whatever means, to more than 25 retail investors in a 30-calendar-day period (a retail communication), or to 25 or fewer (correspondence)? Was it only sent to institutional investors? Those are the same questions that apply to new-tech messages as they did to snail mail and similar old-tech messages.

Interactive content refers to material, generally posted on social media or other digital forums, that can be edited or added to by viewers. It would include message boards and forums, but also anything posted that can be edited with as little as a like or comment. It does not have to be as interactive as it would appear by the name, if the viewer can’t comment, but could like/dislike the post, then that would make it interactive content. Broker dealers must establish, implement, maintain, and monitor a system to supervise its representatives who may use interactive content. Many firms handle this by simply banning the posting of non-approved materials on social media.

Static content refers to material, generally posted on social media or other digital forum as well, but that can not be edited by anyone other than the original creator. Facebook header, or LinkedIn “about me” page would be examples of static content.

Hyperlinks to independent, unaffiliated third-party content - such as neutral research reports or educational material - are permitted on broker-dealer websites. The firm answers for linked content as its own advertising if it paid for, arranged, or helped prepare the content (entangled with it), or endorsed or approved it (adopted the material). Sharing or linking to one specific article or video is itself adoption; an ongoing link to an independent site the firm doesn’t influence is not. If the hyperlink is to a site that doesn’t mention specific securities or investments, it is simply considered educational.

Third-party posts are posts made by customers or someone else not directly affiliated with the member firm. If these are posted on any forum, members site or social media sites, employees business sites or social media sites, or similar, these would not be considered advertisements, provided they did not get entangled or adopt the material as described above. We need to be careful, because if the firm or employee comments or likes the post, that would be them adopting the material, and then it is subject to the standard advertising rules.

Public appearances

These are when an employee associated with a broker-dealer participates in some live forum, such as TV, radio, online forum, public seminar, or similar situation that is generally unscripted. These are not communications and do not need preapproval, though most firms have their own rules. There are certain general rules with public appearances:

• Any recommended securities must meet the reasonable basis suitability before being recommended.
• The speaker must disclose any financial interest or stake they hold in the company or any derivative of the security being discussed.
• The speaker must disclose any material conflict of interest that the firm or the speaker has and is aware of at the time of the event.
• The firms themselves must establish rules, policies, and procedures for dealing with public appearances. Any script, slides, handouts, reports, or anything else similar will be considered communications, and must be handled based on who receives them, as retail communications, correspondence, or institutional communications.

Telemarketing

Telemarketing is making outbound calls to sell securities or other services, with cold calls to people who aren’t expecting your call being the classic example. Calls to clients, prospects you’ve been working with, and friends are still covered by the telemarketing rules, but they get some of the exemptions covered below.

Calls to a residence must be made between 8am and 9pm in the time zone of the person receiving the call, not making it, unless the firm has an established business relationship with them, they invited or permitted the call, or they are a broker or dealer. Before calling, we need to check both the national do-not-call list and the company’s own. Most likely your phone system has that built in. A call to a listed number by mistake is excused only if, among other things, the firm’s copy of the national list is no more than 31 days old. If a prospect asks to not be called again, we must record the request and put them on the company’s do-not-call list right away, and the request has to be honored within a reasonable time: at most 30 days under FINRA’s rule, and 10 business days under the FCC’s, which also applies.

Companies must have a written procedure in place, and provide training to all associated persons, along with ways to monitor and show agents how to use the do-not-call lists. They must make sure that all associated persons are following all rules and regulations regarding telemarketing.

Sidenote

Do-not-call list extra details

There are 2 do-not-call lists we need to be aware of. The national do-not-call list is maintained by the FTC, the Federal Trade Commission, and people have to reach out to them to be added to their list. There is also each individual company’s do-not-call list.

As alluded to earlier, there are exceptions. Calls to people you have a personal relationship with - family, friends, and acquaintances - are exempt from the national do-not-call list, so you don’t need to check that list before calling them. The rest of the telemarketing rules still apply, though: unless they’ve invited the call, you can only call between 8am and 9pm their time, and if they’ve asked to be on the company’s do-not-call list, you can’t call them. These are the personal relationship exemptions.

There are business relationship exemptions as well. If we are the broker-dealer of record for the client, we can call them without checking the national do-not-call list. If the person has done some other type of transaction with us in the past 18 months, we also do not need to check the national do-not-call list. Finally, if the prospect reached out and asked for contact, such as with a postcard, online form, or similar, then we have 3 months from the date of receipt of the request for contact, to reach out without needing to check the national do-not-call list. The company’s own do-not-call list still applies in all of these cases, and asking to be put on it ends the business relationship exemption.

Penalties for do-not-call violations

Do-not-call violations bring civil money penalties, and each illegal call can count as a separate violation, so they add up quickly.

• FTC: up to $53,088 per violation of its Telemarketing Sales Rule, a figure adjusted for inflation (in force since January 17, 2025, and unchanged for 2026). The FTC’s rule doesn’t apply to broker-dealers.
• FCC: its do-not-call rules do apply to broker-dealers. A person who gets more than one unlawful call in 12 months from the same firm can sue for up to $500 per call, or up to 3 times that for a willful or knowing violation (47 U.S.C. 227).
• FINRA: member firms follow FINRA Rule 3230, which mirrors the federal rules, and FINRA enforces it with its own sanctions.