FINRA Eyes Rules Overhaul for Retail Communications

In view of the emergence of such technologies, the proposal would replace the prescriptive pre-use approval requirement with a more risk-based standard for supervising retail communications. Under the proposal, members would be required to establish written procedures appropriate to their business, size, and structure to determine which retail communications require principal approval before use. But when a member's procedures do not require such review of all retail communications before first use, its procedures would need to provide for:

• Training of associated persons on the member’s procedures;
• Documentation of that training; and
• Surveillance and follow-up to ensure that the procedures are implemented and adhered to.

Members would also be required to maintain evidence that these supervisory procedures have been implemented and to make that evidence available to FINRA upon request.

In addition, in developing their procedures, members would need to consider the following nonexhaustive list of risk factors:

• The nature and complexity of the products or services involved, including the member’s or associated person's familiarity with them.
• The qualifications and experience of the preparer of the communication, including anyone paid for or involved in preparing the content, or who endorses or approves it.
• Whether the communication:
  • Makes a financial or investment recommendation or otherwise promotes a product or service of the member;
  • Promotes a product or service offered through an affiliate of the member or another third party;
  • Appears tailored to a specific audience or individual; or
  • Includes performance data, rankings, or comparisons.
• The medium of and distribution method for the communication.
• The member's or associated persons' history of communication concerns identified in member or regulatory reviews as to particular products, services, or methods.

While the proposal would give members flexibility in determining which communications require pre-use approval based on risk factors, Rule 2210’s substantive content standards would not change. Accordingly, members would remain fully responsible for ensuring that communications are fair and balanced, not misleading, and otherwise consistent with those standards.

Addressing Social Media and AI Challenges

The proposal addresses several challenges related to social media and AI. Current FINRA guidance distinguishes between “static” and “interactive” social media content, with only interactive content carved out from the basic pre-use approval requirement. This distinction has become more difficult to apply as social media platforms have evolved. FINRA notes that social media risk, including risk tied to “financial influencers,” does not depend solely on whether content is static or interactive. The proposal would eliminate this distinction and apply the same risk-based supervisory standard to social media as to other retail communications.

The current basic pre-use approval requirement also has presented practical challenges for AI-generated retail communications, particularly in light of the potential speed and volume of such content. Under the proposal, members would apply the same above-described risk-based supervisory standard to AI-generated communications, allowing firms to adjust their level of review based on the risk of the particular tool and content.

Revised Filing Requirements

The proposal would also revise two filing-related requirements. First, the proposal would permit communications concerning registered investment companies that include self-published performance rankings or performance comparisons to be filed within 10 business days after first use or publication. Currently, the rule requires filing at least 10 business days before first use, with the communication withheld from publication until the department has completed its review.

Second, the proposal would begin the rule’s one-year filing requirement for new FINRA members on the date the respective member files its first communication with the department. Currently, during a member’s first year of FINRA membership, the member is required to file widely disseminated retail communications (such as advertisements) with the department at least 10 business days before first use. According to FINRA, many new members do not file any advertisements for several months after becoming a member, thereby effectively shortening the first-year review filing period.

Principles-Based Standard for Recommendations

Lastly, Rule 2210 currently requires retail communications that contain a securities recommendation to have a reasonable basis for the recommendation and to disclose specified information involving potential conflicts of interest. It also requires a member to offer to furnish information supporting the recommendation and requires detailed disclosure in retail communications and correspondence that refers to past specific recommendations of the member. The proposal would replace these requirements with a general prohibition on communications that include a reference to a past specific recommendation provided by the member or an associated person “where such recommendation is not presented in a fair and balanced manner.”

In lieu of the current requirements, the proposal would rely on the rule’s general content standards to ensure investors receive appropriate disclosures necessary to make communications containing a recommendation fair and balanced and not misleading. According to FINRA, “this approach would align the standards for broker-dealers referencing recommendations more closely with the standard for investment advisers giving investment advice.” The proposal also notes that, separate from Rule 2210, SEC Regulation Best Interest (Reg BI) applies when a member or associated person recommends a security or investment strategy involving securities to a retail customer.

Comments on the proposal are due September 11, 2026.