At a glance
- The change replaces Rule 2210's ban on performance projections with a conditional exception, but the coverage of the approval does not specify the conditions or an effective date.
- Nasaa, the state securities regulators' association, said it could not support the change without stronger investor-protection guardrails.
- For broker-dealer advisors, projected-return illustrations that compliance officers once rejected as prohibited can now be submitted for approval, though what comes back depends on how each firm applies the conditions the approval coverage does not spell out.
SEC approved a Finra rule change this week letting broker-dealers market projected returns.
The change replaces Rule 2210's ban on performance projections with a conditional exception, but the coverage of the approval does not specify the conditions or an effective date. Nasaa, the state securities regulators' association, said it could not support the change without stronger investor-protection guardrails.
For broker-dealer advisors, projected-return illustrations that compliance officers once rejected as prohibited can now be submitted for approval, though what comes back depends on how each firm applies the conditions the approval coverage does not spell out. The exception sits in Finra's rulebook, so it binds broker-dealers; the coverage describes no parallel change for SEC-registered investment advisers.
Reported by The Advisor's Note desk from The Advisor's Week newsroom coverage of the SEC approval of Finra's Rule 2210 change. Published . Corrections