[ by Howard Haykin ]

It's June 2012, the beaches are pristine, the sun is shining and everyone on Wall Street is excited to start summer vacation, when some spokesperson at FINRA announces:   'NOT SO FAST' bellows a  a FINRA spokesman who says we have no time to waste if we want to be prepared by effective date, 2/4/13. 

The universal gloom acts like a powerful magnet, dragging responsible staffers into seat where they roll up their sleeves  and begin reading through the new rule text.

NASD Rules 2210 and 2211, related Interpretive Materials, and Incorporated NYSE Rule 472 will be replaced by FINRA Rules 2210 and 2212 through 2216.   So Fast.  announces in Regulatory Notice 12029 that the SEC approved FINRA's proposal to adopt new rules for governing all FINRA member firms' comunicaetions with the public.

Instead of 6 categories of communications, as there were under NASD Rule 2210, there now will be just 3 categories.  In the past communications consisted of:

1. Advertisements
2. Sales Literature
3. Correspondence
4. Institutional Sales Material
5. Independently Prepared Reprints
6. Public Appearances

As adopted, communication categories now will include:

• Institutional communication includes written (including electronic) communications distributed or made available only to institutional investors, but does not include a firm’s internal communications. “Institutional investor” generally has the same definition as under NASD Rule 2211(a)(3).

• Retail communication includes any written (including e-) communication distributed or made available to more than 25 retail investors within any 30 calendar-day period. “Retail investor” includes any person other than an institutional investor, regardless of whether the person has an account with the firm.

• Correspondence includes any written (including e- ) communication distributed or made available to 25 or fewer retail investors within any 30 calendar-day period.

Communications that currently qualify as advertisements and sales literature generally fall under the definition of “retail communication.” To the extent that a firm distributes or makes available a communication that currently qualifies as an independently prepared reprint to more than 25 retail investors within a 30 calendar-day period, the communication also falls under the definition of “retail communication.”

Last Minute For Those Still Having Difficulty.   FINRA has recorded a podcast - the first of 2 parts - on Communication with the Public Consolidated Rule – Part 1.  This podcast, first in a two-part series, discusses the communication categories and content standards in FINRA’s new consolidated Communications with the Public rule.  It's 6-1/2 minutes long.
 

To access the podcast, go to:   [ FINRA Podcast, 1/12/13 ].  You'll be glad you did.