FINRA issues interpretive guidance on related performance in institutional communications

Abstract

Purpose

To analyze the June 9, 2017 Financial Industry Regulatory Authority, Inc. (“FINRA”) interpretive letter permitting the use of Related Performance Information in continuously offered closed-end registered investment company sales materials distributed solely to institutional investors.

Design/methodology/approach

Provides background, including the application of FINRA Rule 2210, and explains the conditions under which fund marketing materials may contain Related Performance Information.

Findings

While the interpretive letter will not result in a fundamental shift in the Industry’s approach to providing Related Performance Information of open- and closed-end funds to institutional investors, it also represents FINRA’s ongoing recognition that communications provided solely to institutional investors do not raise the same investor protection concerns as communications provided to retail investors.

Originality/value

Expert guidance from experienced investment management and investment fund lawyers.

Citation

Caccese, M.S., Pagnano, C., Rohrer, E. and Corral, X. (2017), "FINRA issues interpretive guidance on related performance in institutional communications", Journal of Investment Compliance, Vol. 18 No. 4, pp. 36-39. https://doi.org/10.1108/JOIC-08-2017-0058