FINRA relaxes restrictions on pre-inception performance data
Journal of Investment Compliance
ISSN: 1528-5812
Article publication date: 21 August 2019
Issue publication date: 16 October 2019
Abstract
Purpose
To explain the significance of a recently issued interpretive letter in which FINRA staff agreed to permit the use of pre-inception index performance data by passively managed, registered open-end investment companies.
Design/methodology/approach
FINRA recently issued an interpretive letter extending previously issued guidance by permitting passively managed open-end registered investment companies including separately-managed series of a business trust to use pre-inception index performance data in Institutional Communications.
Findings
The 2019 Letter is an important shift in how FINRA staff views PIP data in Institutional Communications by acknowledging that passively managed open-end funds should be treated in a similar manner as passively managed exchange-traded funds. This shift will be a welcome development for FINRA member firms wishing to include PIP data in marketing materials for the passively managed open-end funds they distribute.
Originality/value
Practical guidance from experienced investment management and broker-dealer lawyers.
Keywords
Citation
Kerr, R.F. and Rogers, M.J. (2019), "FINRA relaxes restrictions on pre-inception performance data", Journal of Investment Compliance, Vol. 20 No. 3, pp. 6-9. https://doi.org/10.1108/JOIC-04-2019-0026
Publisher
:Emerald Publishing Limited
Copyright © 2019, K&L Gates LLP.