Securities Regulation Daily Wrap Up, INVESTMENT COMPANIES—ICI presents recommendations for modernizing FINRA Rule 2210, (Jun 16, 2025)

By Anne Sherry, J.D.

The group urges FINRA to align its communications rule with the SEC marketing rule.

Responding to FINRA’s request for comment, the Investment Company Institute recommended that the self-regulator make several changes to Rule 2210 (Communications with the Public) to modernize it and bring it in line with the SEC’s 2020 marketing rule. ICI believes that the differing regulatory frameworks make compliance difficult for regulated entities and can result in investor confusion.

In March, FINRA announced that it would undertake a review to modernize its rules pertaining to member firms and associated persons. ICI observes that FINRA last reviewed its rules on communications with the public in 2014. Since then, the SEC comprehensively overhauled its marketing rule for investment advisers, and FINRA’s ruleset has not kept pace.

SEC-FINRA alignment. ICI recommends that FINRA align Rule 2210 with the SEC marketing rule. The FINRA rules apply to broker-dealers (and by extension funds), while the SEC rules apply to registered investment advisers.

The SEC allows investment advisers to show multiple types of performance information, including hypothetical performance, even to some retail investors. FINRA has already taken steps towards a more permissive approach to communicating some of these performance metrics, the comment letter notes. ICI believes that some forms of performance information, subject to safeguards, would be helpful to retail investors.

Modern technologies. The industry group also makes a few recommendations to modernize the rule’s approach to modern technologies. FINRA should clarify and provide additional guidance (ideally codified within its rules) relating to the use of social media. ICI would find it particularly helpful to have additional examples of social media posts that are not subject to Rule 2210. A lack of clarity about what is subject to the rule has impeded firms from creating educational materials that do not pertain to specific products or services.

FINRA should also rework the requirement to include a member’s full name in communications with the public. Since this requirement was adopted in 2014, more advertisements are going out to mobile devices and on social media platforms with character limits, such as X. ICI suggests that firms be allowed to include an abbreviated, but still recognizable, name while hyperlinking to more information.

Furthermore, FINRA should engage with industry participants before issuing more guidance on the use of artificial intelligence. While ICI member firms do not currently use AI technology on a standalone basis without human oversight, “technology continues to develop rapidly, and members continue to explore ways to enhance their AI processes.”

Other recommendations. ICI also recommends that members be allowed to present a fund’s average credit quality in communications with the public. The letter restates FINRA’s concerns about the utility of this information, the lack of standardization in methodologies, the treatment of unrated securities, and the potential for misleading presentation. ICI also allows for other valid and more comprehensive ways to present information about a fund’s credit quality than through an average calculated by the fund itself. However, it believes that if accompanied by appropriate disclosure, this metric could be easier for investors to understand and offer funds more flexibility.

Finally, ICI expressed some dissatisfaction with the consistency and timeliness of FINRA’s Rule 2210 review process. Some members have been dinged for practices that other FINRA members use, and members have raised concerns that the comment process itself creates new substantive requirements outside existing rules or guidance. ICI also believes that the exemption provided by Rule 2210(b)(1)(C) has created an inefficient and costly industry practice of refiling advertising materials to obtain a “clean” letter from FINRA. “Clear guidance that advertising materials may be used even without a clean letter may provide comfort to third parties and decrease voluntary filings,” ICI writes.

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