A Pivotal Moment for Broker-Dealer Communications: FINRA Proposes Sweeping Amendments to Rule 2210

In just one week, FINRA proposed two significant changes to its communications rules. Together, the proposed amendments would reshape how broker-dealers create, approve, supervise, and distribute communications with clients and prospects—from communicating performance projections to social media posts and AI-generated content. 

The first proposal would, for the first time, allow broker-dealers to use performance projections and targeted returns in certain communications. The second (a request for comment published July 9, 2026) would eliminate FINRA’s mandatory pre-approval process for retail communications and replace it with a firm-administered, risk-based system. Given the substantial changes that are likely ahead, it is critical that firms understand these major changes, so they are prepared to act when the rules are finalized.

FINRA RULE 2210 TODAY

FINRA Rule 2210 governs three categories of broker-dealer communications with the public based on audience size and type:

• Retail communications (more than 25 retail investors in any 30-day period) face the most oversight: a principal must approve each one before use or filing—regardless of the communication’s risk level—and some categories must be filed with FINRA before or shortly after first use.
• Correspondence (25 or fewer retail investors in any 30-day period) is supervised under separate rules, generally without mandatory pre-use approval.
• Institutional communications (distributed only to banks, insurance companies, and other sophisticated institutional investors) require supervisory procedures but not pre-use approval.

All communications, regardless of category, must be fair, balanced, and not misleading — providing a sound basis for evaluating the security or service and avoiding exaggerated, promissory, or unwarranted claims.

Rule 2210(d)(1)(F) has long prohibited firms from predicting or projecting performance, implying past performance will recur, or making exaggerated forecasts, with three narrow exceptions (hypothetical math illustrations, certain analysis tools, and price targets in research reports meeting specific conditions). Across its two 2026 proposals, FINRA points to four recurring themes to justify reform of the current Rule:

• The Marketing Rule gap. Since 2022, investment advisers have been able to use projected performance and targeted returns under the SEC’s Marketing Rule, while broker-dealers were not. This created a competitive disadvantage for broker-dealers and inconsistent information for clients of dual registrants: a client might get projected-return materials from the advisory side of a firm but not the brokerage side, for the same investment.
• A blurred social media line. FINRA has long distinguished “static” social media content (treated like retail communications) from “interactive” content (supervised more lightly), but that distinction has become unworkable as social media posts routinely blend both.
• The cost of blanket pre-approval. Requiring principal pre-approval of every retail communication, regardless of risk, spreads supervisory resources evenly across high- and low-risk content alike.
• A stalled 2023 attempt. FINRA’s narrower 2023 proposal (SR-FINRA-2023-016, limited to institutional and certain private-placement communications) was approved by SEC staff in July 2024 but then stayed by the Commission, where it remains pending. FINRA has stated it will withdraw that proposal if the current, broader proposal is approved.

PROPOSAL 1: PERFORMANCE PROJECTIONS AND TARGETED RETURNS

The first proposal, pending before the SEC, would create a new exception to allow firms to project performance or provide a targeted return for a security, portfolio, or investment strategy, if those projections meet two conditions:

• Audience tailoring. The firm must have written policies ensuring the communication is relevant to the specific audience’s financial situation and objectives (modeled on the Marketing Rule). This effectively rules out mass retail marketing, but a projection tailored to an individual client (for example, as part of a Regulation Best Interest recommendation) would be permitted.
• Adequate disclosure. The communication must explain the criteria and assumptions used to calculate the projection, along with its risks and limitations.

In response to comments, FINRA's June amendment made three changes:

1. Eliminating the standalone “reasonable basis” requirement – FINRA concluded that Rule 2210’s existing content standards already preclude unreasonable projections.
2. Dropping two specific disclosure requirements – Partial Amendment No. 1 eliminated the requirements to disclose (i) whether a projected performance or targeted return is net of anticipated fees and expenses, and (ii) the reasons why the projected performance or targeted return might differ from actual performance, relying instead on the general disclosure requirement to explain the criteria and assumptions used in calculating the projection. 
3. Adding a lighter recordkeeping requirement – firms must retain records on the source of any performance projection or targeted return used.

This proposal is broader than the stayed 2023 attempt (which FINRA intends to withdraw if this proposal is approved) and is not limited to institutional or private-placement communications and does not categorically bar retail distribution, relying instead on the audience-tailoring condition to limit misuse.

The Securities Industry and Financial Markets Association (SIFMA) and the Investment Company Institute (ICI) have both publicly supported the proposal, while urging FINRA to align it even more closely with the Marketing Rule—including by removing the reasonable-basis condition and permitting back tested and related performance consistent with that rule. The North American Securities Administrators Association (NASAA), representing state securities regulators, filed a comment stating that it cannot support the proposal without additional investor-protection guardrails, and recommended that FINRA require broker-dealers to confirm that a retail investor has the financial expertise and resources to understand a projection and limit retail use of projections to communications tied to a specific investment recommendation.

Broker-dealers distributing adviser-sponsored private funds, model portfolios, and alternative strategies would finally be able to include projected returns in marketing materials, once they put the required audience-tailoring and disclosure controls in place. This is particularly significant for dually registered firms and broker-dealers that distribute third-party asset managers’ materials because it would allow sharing projection-based marketing already permitted on the advisory side of the business. For example, sharing target-date illustrations or private-fund return projections, thus narrowing a gap that both SIFMA and ICI have flagged as a source of investor confusion.

PROPOSAL 2: RETAIL COMMUNICATIONS, SOCIAL MEDIA, AND AI

On July 9, 2026, just days after amending the performance-projection proposal, FINRA requested comment on a separate overhaul of Rule 2210’s supervisory framework, shifting retail-communications oversight from FINRA-administered pre-approval to a risk-based system that firms administer themselves. The comment period runs through September 11, 2026.

Risk-Based Pre-Approval

Today, all retail communications (to more than 25 retail investors within 30 days) require principal pre-approval before use. A ‘principal’ for this purpose is an individual holding the applicable principal registration (typically a General Securities Principal, or a Supervisory Analyst for certain research-related communications) covering the relevant product type, and approval requires that person to confirm the communication satisfies Rule 2210’s content standards before first use or filing, with the firm recording the principal's name and approval date. The proposal would replace this blanket rule with a risk-based system: firms would adopt written procedures determining which categories of retail communications need pre-approval, based on factors like product complexity, preparer experience, use of performance data, and distribution method. Lower-risk categories could bypass pre-approval—but firms must still provide training, documentation, and ongoing surveillance to support that choice. Correspondence and institutional communications are unaffected, meaning they will continue to be governed by their existing, more flexible supervisory-procedures standard—rather than principal pre-use approval—exactly as they are today; this proposal changes only how retail communications are pre-approved.

No More Static vs. Interactive Social Media

FINRA would eliminate the current distinction between “static” social media (treated as retail communications) and “interactive” content (supervised more lightly), recognizing that a single post often blends both. All social media would be supervised as retail communications, so firms can no longer rely on the interactive label to justify lighter oversight.

AI-Generated Content

FINRA takes a technology-neutral approach: AI-generated communications, chatbot responses, and AI-assisted drafts remain fully regulated business communications, subject to the same supervision, recordkeeping, and content standards as anything else. Firms must manage risks like data protection and AI “hallucinations” (inaccurate or fabricated output), and confirm their AI tools perform as expected.

Other Changes

• Simplified recommendation disclosures. FINRA would drop specific disclosure requirements for communications recommending securities (e.g., market-making or conflict disclosures), relying on the general content standards instead.
• Adjusted new-member filing deadline. New member firms’ 10-business-day advance filing requirement would run from their first approval request, rather than their literal first year of membership, helping firms that don’t send retail communications right away.

FINRA’S Rationale 

FINRA frames this as refocusing supervisory resources on higher-risk communications and says investor protection won’t suffer, since the general content standards remain unchanged.
In publishing the proposal, FINRA itself frames the change as a modernization that would refocus supervisory resources on higher-risk communications, stating that a risk-based framework would allow firms to tailor pre-use review “to present and future risks” rather than applying blanket principal pre-approval regardless of risk level. FINRA acknowledges, however, that the shift places more responsibility on broker-dealers themselves, who will need robust written classification criteria, training, and ongoing surveillance to satisfy examiners that lower-risk communications were appropriately excused from pre-use approval.

KEY TAKEAWAYS

Neither proposal is final. Firms must continue following current Rule 2210—including the existing ban on performance projections—until a final rule is adopted and FINRA announces an implementation date. But given the scope of these potential changes, firms need to start preparing now.

1. Build a unified governance workflow. If you distribute content through both advisory and broker-dealer channels, create a single intake process that captures both Marketing Rule and Rule 2210 requirements: reducing duplication while keeping each regime's obligations distinct.
2. Inventory performance-related content. Identify materials using or likely to use projected performance, targeted returns, or model/back-tested performance, and start building substantiation files and audience-tailoring controls now. Flag model and back-tested performance separately—the Rule 2210 exception doesn’t cover it, even though the Marketing Rule does.
3. Start drafting risk-based classification procedures. Begin building the written criteria, decision trees, training, and surveillance systems you’ll need to classify retail communications by risk once the pre-approval proposal is finalized.
4. Review social media governance. Prepare to apply consistent supervision across all social media, regardless of whether it’s “static” or “interactive.”
5. Extend AI governance to communications. Make sure AI-generated content (drafts, chatbots, personalized marketing) goes through the same approval, review, and recordkeeping as anything else, and address hallucination risk and data protection.
6. Track the timeline and consider commenting. Comments on FINRA’s Partial Amendment No. 1 to the performance-projection proposal are due July 28, 2026 (21 days after its July 7, 2026 Federal Register publication); no formal timetable for a final SEC decision has been announced. Comments on the pre-approval/social media/AI proposal are due September 11, 2026. Consider submitting comments on provisions that would affect your business.

This is a fundamental change in how FINRA regulates broker-dealer communications. Firms that prepare now will be able to implement the new requirements smoothly—and will have a track record to show examiners that their compliance programs anticipated the change, rather than scrambled to catch up with it.

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