FINRA Seeks To Modernize Rule 2210 – Communications With The Public

Highlights

• The Financial Industry Regulatory Authority (FINRA) is proposing to replace the long-standing principal pre-use approval requirement for retail communications with a risk-based supervisory framework, requiring member firms to adopt written procedures tailored to their business, size and structure to determine which communications must have principal pre-use approval.
• The proposal would remove the distinction between interactive social media and static communications and instead apply the same risk-based supervisory standard to all social media communications.
• FINRA seeks to modernize communications rules to reflect evolving practices and technologies including social media and generative artificial intelligence while attempting to more closely align the broker-dealer communication standards for investment recommendations with similar standards applicable to investment advisers.

The Financial Industry Regulatory Authority (FINRA) on July 9, 2026, released Notice 26-14, which seeks comment on a proposal to modernize Rule 2210 (Communications with the Public) through significant amendments reflecting evolving communication practices and technologies, particularly the growth of social media and advances in generative artificial intelligence (AI). FINRA seeks comments on the proposal by September 11, 2026.

Proposal Highlights

Principal Pre-Use Approval No Longer a Prescriptive Requirement for Retail Communications

• FINRA proposes to eliminate the prescriptive requirement under Rule 2210, which states that a principal of the firm must approve each retail communication prior to its use, replacing it with a risk-based supervisory framework. Members would instead be required to adopt written procedures – tailored to their business, size and structure – that determine which categories of retail communications require principal pre-use approval.
• FINRA identified eight nonexclusive factors that member firms should consider when determining whether a retail communication requires pre-use principal approval:
  • nature and complexity of products or services that the communication concerns, including the member's or associated person's familiarity with the product or service
  • qualifications and experience of the preparer of the communication, including persons paid for or involved in the preparation of the content or who explicitly or implicitly endorse or approve the content
  • whether the communication makes a financial or investment recommendation or otherwise promotes a product or service of the member
  • whether the communication promotes a product or service offered through an affiliate of the member or another third party
  • whether the communication appears to be tailored to a specific audience or individual
  • the inclusion of performance data, rankings or comparisons
  • medium and distribution method for the communication
  • the member's or associated persons' history of communication concerns identified in member reviews or regulatory reviews as to particular products, services or methods
• Written procedures must be reasonably designed to ensure retail communications comply with existing content standards that require communications to be fair and balanced and prohibit members from making any false, exaggerated, unwarranted, promissory, or misleading statement or claim in any communication.
• Where a member firm's procedures do not include pre-use principal approval of retail communications, firms must provide for education and training of associated persons, documentation of the training, and ongoing surveillance and follow-up to ensure such procedures are implemented and adhered to.
• Evidence must be maintained that supervisory procedures have been implemented, carried out and made available to FINRA upon request.
• Notably, the proposal would retain principal pre-use approval specifically for retail research reports,¹ which are carved out from the new risk-based standard.
• Correspondence and institutional communications are not impacted by the proposal and will continue to be governed by flexible risk-based standards.

Removal of Distinctions Between Interactive Social Media and Static Communications

• FINRA acknowledged that its long-standing current guidance distinguishing between static content (requiring principal pre-use approval) and interactive content has become increasingly difficult to apply.
• The amendments would remove the distinction between interactive social media and other communications. Instead, all social media communications would be assessed under the same risk-based supervisory standard applicable to retail communications.
• FINRA specifically noted that member firms using influencers and other paid promoters should consider, as part of their risk-based assessment, the qualifications, experience and conflicts of persons involved in preparing or endorsing content.

• FINRA reiterated that its rules and guidance are intended to be technologically neutral and member firms remain responsible for their communications regardless of whether generated by a human or AI.
• The proposed risk-based structure is intended to address concerns from the industry regarding challenges associated with the application of pre-use principal approval to large volumes of AI-generated retail communications.
• FINRA noted that firms may consider establishing processes and governance frameworks to guide development and deployment of generative AI communication tools, including risk management practices to address accuracy concerns such as hallucinations and data protection, among others, and ongoing monitoring to ensure solutions perform as expected consistent with FINRA's review and content standards.

Retail Communication Filing Requirements

• For new members, FINRA proposes that the one-year pre-use filing requirement (currently running from the central registration depository effective date of membership) would instead begin on the date the new member files its first communication with FINRA's Advertising Regulation Department. This proposal is based on data showing roughly 60 percent of first-year filers wait at least 91 business days before their first filing.
• For retail communications concerning registered investment companies containing self-published performance rankings or comparisons, the requirement to file prior to first use would be changed to a post-use filing within 10 business days, consistent with treatment of other fund-related communications.

• FINRA proposes deleting the detailed requirements of current Rule 2210(d)(7) (which are based on the repealed Investment Advisers Act advertising rule) and replacing them with a general prohibition on referencing a past specific recommendation unless presented in a fair-and-balanced manner. The change is intended to better align the broker-dealer standard with those contained in the U.S. Securities and Exchange Commission's (SEC) Investment Adviser Marketing Rule applicable to registered investment advisers.
• FINRA would rely on Rule 2210's general content standards to ensure investors receive appropriate disclosures necessary to make a communication containing recommendations fair and balanced and not misleading.
• The proposal intends to align the broker-dealer standard more closely with the SEC's Investment Adviser Marketing Rule, which applies a fair-and-balanced standard to advertisements referencing specific investment advice.

Key Takeaways

Although the proposal remains subject to a comment period, SEC review, and a potential revision prior to approval and publication of an implementation date, firms should consider taking steps to prepare due to the scope of potential changes.

• Begin development of risk classification procedures and corresponding surveillance systems – utilizing the non-exhaustive list of factors included in the proposal – to classify retail communications to identify those that will (and will not) require principal pre-use approval. Firms should consider building upon existing frameworks for institutional communications and correspondence that Rule 2210 currently requires risk-based policies and procedures to supervise.
• Identify education and training requirements for associated persons and ongoing surveillance needs with respect to retail communications not subject to pre-use principal approval.
• Review current social media governance framework to determine the impact of no longer classifying social media communications as either interactive or static.
• Ensure risk management processes and procedures currently address the development and deployment of AI-generated content as well as hallucination risk and data protection.

Replacement of the long-standing principal pre-use approval requirement for retail communications with a risk-based framework would prove a fundamental change that provides firms greater flexibility and potential operational efficiencies. On the other hand, firms will no longer be able to rely on meeting the rule requirements by obtaining principal pre-use approval for retail communications. Compliance will become contingent on the development and implementation of a reasonable supervisory framework.

Footnote

^{1. See Rule 2241(a)(11) for the definition of "research reports."}

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