FINRA has proposed a change to Rule 2210 that would modify the requirement for approval of investment company sales material by principals at securities firms selling fund shares. 

Rule 2210, contained in the NASD Manual, requires that a registered principal of a FINRA member firm approve in writing all advertisements, sales literature, and independently prepared reprints (collectively, "sales material") prior to use. Certain types of sales material, such as advertisements and sales literature concerning mutual funds or variable insurance products must be filed with the FINRA Advertising Regulation Department. Based on recommendations from a FINRA task force, and to eliminate redundancy, FINRA proposed to create an exception to Rule 2210's registered principal approval requirements for intermediary firms that use the sales material of another firm. The exception would apply only to sales material that another firm has filed with FINRA, and for which FINRA has issued a review letter finding that the material appears to be consistent with applicable standards.

In a letter to the SEC, the ICI stated that it supports the proposed change to Rule 2210. The ICI believes that the proposal should alleviate burdens on some intermediary firms without compromising investor protection. If the proposal is adopted, according to ICI's letter, intermediary firms will be able to use investment company sales material absent the delay and costs associated with a secondary layer of principal review.

Click to access the comment letter.