FINRA PROPOSES TO EXEMPT MARKET LETTERS FROM PRINCIPAL REVIEW
FINRA has proposed exempting market letters from its principal review requirement. FINRA considers market letters to include discussions about broad-based indices, commentaries about market conditions, technical and statistical analyses, and notices of ratings or price target changes. They may not include recommendations or marketing. Additionally, market letters could be sent without principal review only if sent to institutional customers, existing retail customers, and fewer than 25 prospective retail customers. FINRA has proposed this change in order to expedite the dissemination of market information.
OUR TAKE: This change will facilitate continuous communication with customers especially during market volatility. Firms still must ensure that any communication comply with FINRA’s content requirements.