Potential Changes to FINRA Rule 2210: Broker-Dealer Retail Communications

 

FINRA has published proposed amendments to Rule 2210 Communications with the Public that would significantly modernize the supervisory framework governing broker-dealer communications. The proposal is intended to better accommodate today’s digital communication environment, including social media, dynamic content, and AI-generated communications, while shifting toward a more principles-based, risk-focused supervisory model.

The most significant proposed changes include:

Risk-Based Principal Approval Framework: Rather than requiring principal pre-use approval for most retail communications, firms would be permitted to establish written, risk-based supervisory procedures that determine which communications require pre-use approval versus post-use supervisory review. This approach is intended to provide firms with greater flexibility while allowing supervisory resources to be focused on higher-risk communications.

Factors for Risk Assessment: FINRA has identified several non-exclusive factors firms should consider when determining whether a communication warrants pre-use approval, including:

• The complexity of the product or service being discussed;
• Whether the communication includes a recommendation;
• Whether it promotes products or services offered by affiliates;
• Whether the communication appears tailored to an individual customer;
• The inclusion of performance information, rankings, or investment-related claims;
• The firm’s prior regulatory history or supervisory concerns related to communications.

Modernization of Retail Communication Filing Requirements: FINRA has also proposed revisions to the communications filing requirements that would provide firms with greater flexibility regarding certain retail communications that currently require filing prior to first use. The proposal recognizes the practical challenges associated with today’s rapidly evolving digital content and seeks to better align filing obligations with communications that present heightened regulatory risk.

Overall, the proposal represents a significant shift away from a prescriptive, one-size-fits-all approval model toward a risk-based supervisory framework that more closely resembles the SEC’s principles-based approach under the Investment Advisers Act Marketing Rule (Rule 206(4)-1).

Rather than prescribing when principal approval is required, FINRA would place greater responsibility on firms to design, implement, and document supervisory procedures that are appropriately tailored to the firm’s business model and communication risks.

From a practical perspective, these amendments could substantially improve operational efficiencies by reducing pre-publication approval bottlenecks for certain lower-risk, time-sensitive communications—particularly social media and other digital content—while preserving robust supervisory oversight for higher-risk communications.

Comments on the proposal are due by September 11.

Article written by Kimberly Johnson, Senior Vice President, Compliance