The same fund write-up can be correspondence on Monday and a retail communication by Friday. Only the retail-reader count changes, and it decides whether a principal approves the piece first, files it, or reviews it afterward.
The Financial Industry Regulatory Authority (FINRA) governs everything your firm writes or posts for outsiders through Communications with the Public (FINRA Rule 2210). It sorts every written or electronic piece by audience into three categories, each with its own approval, filing and review duties.
- Correspondence: any written or electronic communication distributed or made available to 25 or fewer retail investors within any 30 calendar-day period.
- Retail communication: a communication that reaches more than 25 retail investors within any 30 calendar-day period.
- Institutional communication: a communication distributed or made available only to institutional investors, excluding the firm's internal communications.
A retail investor is anyone who is not an institutional investor, whether or not the person has an account. Under Rule 2210(a)(4), institutional investors include:
- Persons described in FINRA Rule 4512(c): banks, savings and loans, insurance companies, registered investment companies, registered investment advisers, and any other person with total assets of at least $50 million.
- Governmental entities and their subdivisions.
Common mistakes
- Counting the wrong audience. Only retail recipients count, and 26 across several sends in 30 days makes a retail communication.
- Flipping the filing clock. See Filing requirements in Content for which pieces are filed before use and which after.
- Pre-approving the wrong social content. A live reply needs no pre-approval, but the static profile does (guideline 1 under Social media).
Bottom line
- Correspondence reaches 25 or fewer retail investors in 30 calendar days, retail communications reach more, and institutional pieces reach only institutional investors.
- A qualified principal pre-approves retail communications; correspondence, institutional pieces and interactive posts are reviewed under written procedures.
- File fund, DPP and CMO retail pieces within 10 business days after use; file nonstandard rankings, security futures and new-member media pieces 10 business days before.
- Keep communications and approvals three years, two easily accessible, with use dates and the approving principal's name.
Exam shortcut
When a stem describes a communication, classify it first, then decide approval, filing and content. DECISION: Only institutional recipients and no expected retail forwarding → institutional communication, reviewed under written procedures; more than 25 retail investors in 30 days, counting expected forwarding → retail communication, pre-approved by a principal unless an exception applies; 25 or fewer retail investors → correspondence, reviewed by a principal after use.
The full lesson (about 4,813 words, 32 min read) adds 2 worked examples, all 6 common mistakes, a self-check, free in the app.
Learning objectives
- C11
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