FINRA Seeks Comments

The proposed rule would require "an appropriately qualified registered principal of the firm" to approve each retail communication before the communication was used or filed with FINRA.

"The principal registration required to approve particular communications would depend upon the permissible activities for each principal registration category," officials say.

The content standards that now apply to advertisements and sales literature generally would apply to retail communications, officials say.

One proposed paragraph would add new language "concerning comparative illustrations of the mathematical principles of tax-deferred versus taxable compounding," officials say.

Originally, FINRA included that advice in guidance aimed at sellers of variable annuity and variable life products.

Now, by putting the advice in a section that applies to all FINRA products, "FINRA is clarifying that these standards apply to any illustration of tax-deferred versus taxable compounding, regardless of whether it appears in a communication promoting variable insurance products or some other communication, such as one discussing the benefits of investing through a 401(k) retirement plan or individual retirement account," officials say.

Comments on the proposed changes are due Nov. 20.

More information about the notice is available here.