September 11 heralds closing-time for any industry comments on FINRA’s Rule 2210 overhaul, changing the nature of risk-based approvals for good.
As one of the biggest rewrites in the financial advertising world in over a decade, this Regulatory Notice 26-14 proposal (published in July) is a big deal; replacing the need for a registered principal to pre-approve retail communications before they can be used.
The intended shift would see a risk-based supervisory framework designed by firms themselves, and therefore tailored to their size, business model, and channels they utilise to engage investors.
Similarly, the proposal closes the split that currently exists between ‘interactive’ social media posts (mostly exempt from review) and static content that is subject to pre-use checks. In practice, this should streamline how a range of communications must be filed with the FINRA’s Advertising Regulation Department, and when, under the same standard.
Elsewhere, the notice looks to shift when a first year filing review starts for new member firms. Today, it is from the effective date of a firm’s Capital Requirements Directive (CRD). But the proposal seeks ‘day zero; to be the first time a company files any communication, looking to help firms that do not publish anything for months after they have registered.
As we see across the investment industry, retail content is being increasingly generated with AI tools, as well as on social platforms. Both work at a rate which principal-approval workflows cannot maintain, hence why this proposal and consultation has come to pass.
Before the window shuts, comments are invited by FINRA before September 11, 2026 through its online comment form, or by mail to the Office of the Corporate Secretary.
It grants the opportunity for firms to shape this intended risk-based protocol, rather than simply having to comply with a surprising necessary mandate, as can so often be the case for regulatory changes!
So, what does this mean for fund marketers?
This seismic change will affect distribution environments that many IRs and marketers operate in, concerning wirehouses, broker-dealer platforms, or dual-registered advisers.
If it passes, less uniform risk-based supervision will see variations in how quickly or slowly firms clear compliant fund materials, commentaries and factsheets. Any teams supplying content to distribution partners should expect them to be rewriting their internal review procedures in the coming months. It is worth finding out how their new-look approvals process will likely run.
Of course, the fact that AI-generated content has influenced a major regulatory decision is an alarm bell for compliance or legal teams. Drafted materials (covering everything from websites to email outreach to socials) must still undergo human review, all while governance in the technology continues to gather steam.
Source
FINRA, Regulatory Notice 26-14, “FINRA Requests Comment on Proposed Changes to Modernize Rule 2210 (Communications with the Public)”
