SEC Approves FINRA Rule 2210 Amendments Permitting Projections and Targeted Returns; Broader Rule 2210 Modernization Proposal Pending

Key Points

• On October 15, 2026, the SEC approved amendments to FINRA Rule 2210 that will allow broker-dealers to include projected performance and targeted returns in communications, if they meet conditions relating to written policies and procedures, disclosure, and recordkeeping.
• The amended rule does not expressly require a reasonable basis for a projection or target, but FINRA stated that in most cases members would be unable to demonstrate compliance without records supporting the criteria and assumptions behind it.
• Because FINRA Rule 2210 and the SEC’s Investment Adviser Marketing Rule are similar but not identical, FINRA would not conclude that disclosure satisfying the Marketing Rule will always satisfy Rule 2210.
• Separately, FINRA has proposed broader Rule 2210 changes in Regulatory Notice 26-14 that, if adopted, would replace the requirement that a principal approve each retail communication before use with a risk-based supervisory standard.

On October 15, 2026, the Securities and Exchange Commission (SEC) approved a Financial Industry Regulatory Authority (FINRA) proposal, as modified by Partial Amendment No. 1, that amends FINRA Rule 2210 (Communications with the Public). Under the amendments, broker-dealers may include projected performance and targeted returns in their communications, subject to specified conditions (Release No. 34-106675; File No. SR-FINRA-2026-004). The approval order was published in the Federal Register on October 20, 2026 (91 FR 66371). For member firms, the more significant story may be that this approval is one part of a larger overhaul: it arrives while FINRA weighs a much broader rewrite of how retail communications are supervised and filed.

Separately, FINRA is considering a broader set of Rule 2210 changes it proposed in Regulatory Notice 26-14 (July 9, 2026). Those changes would replace the principal pre-use approval requirement for retail communications with a risk-based supervisory standard, revise certain filing requirements, and streamline the standard for communications that contain recommendations. The comment period on that proposal closed on September 11, 2026.

Background: The Rule 2210(d)(1)(F) Prohibition

Rule 2210(d)(1)(F) has long barred member communications that predict or project performance, imply that past performance will recur, or contain exaggerated or unwarranted forecasts. FINRA reads that bar to reach targeted returns as well. Previously, the narrow carve-outs covered mathematical illustrations, investment analysis tools, and price targets in research reports. FINRA justified the new exception in part on investor confusion: an investor could receive a projection about an investment from its adviser or issuer, but not from the broker-dealer selling it.

The New Fourth Exception

The amendments add a fourth exception to Rule 2210(d)(1)(F). The new exception permits communications that project performance or provide a targeted return for a security, a securities portfolio, or an asset allocation or other investment strategy, if the following conditions are met:

• Written policies and procedures. The member must adopt and implement written policies and procedures reasonably designed to ensure that the communication is relevant to the likely financial situation and investment objectives of its intended audience. 
• Disclosure. The member must provide sufficient information for the intended audience to understand (a) the criteria used and assumptions made in calculating the projection or target, and (b) the risks and limitations of using it in making investment decisions. 
• Recordkeeping. Rule 2210(b)(4)(A)(iv) is amended to require members to keep records of the source of any projection of performance or targeted return used in a communication. 

Key Interpretive Points

• Practically an institutional tool. Mass-market communications and materials for general circulation, including those aimed at a general retail audience, generally fall outside the exception, because a firm cannot reasonably expect such content to be relevant to each recipient. The SEC expects projections and targets to flow mainly to institutional and other sophisticated investors, although the exception is not formally limited to institutional customers. 
• Firms set their own audience criteria. The rule leaves the method for identifying eligible recipients to each firm, and FINRA declined to offer safe harbors keyed to recipient type. That flexibility cuts both ways: examiners will likely test whether a firm’s chosen criteria screen for investors with the resources and expertise to evaluate the information, so the rationale for the criteria should be documented. 
• Deleted text, same expectations. Partial Amendment No. 1 removed the express references to fee treatment and to reasons actual results may differ. Firms should not read much into the deletion: the SEC’s order states that a member would still be expected to disclose these items to meet the remaining disclosure condition, with room to tailor the level of detail to the audience. 
• No express reasonable basis requirement, but substantiation is still needed. FINRA dropped the proposed reasonable basis requirement, taking the view that the general content standards already preclude unreasonable projections. FINRA also said that, in most cases, members would be unable to demonstrate compliance without records supporting the criteria and assumptions behind a projection or target. 
• Sponsor-supplied numbers still require diligence. A broker-dealer distributing a projection built by an issuer or adviser need not rebuild the model, but it cannot simply pass the number through. FINRA expects the member to evaluate the source and confirm the projection is supported, and to consider whether the third party will give it enough information to do so. 
• Adviser-side compliance does not carry over automatically. Because the Rule 2210 text and the Investment Adviser Marketing Rule are similar but not identical, FINRA would not say that Marketing Rule-compliant disclosure will always satisfy Rule 2210. 
• A deliberately incremental step. The exception reaches only projected performance and targeted returns, which are treated identically. Other forms of hypothetical performance that advisers may use under the Marketing Rule, such as model, backtested, or extracted performance, remain off-limits for broker-dealer communications. FINRA characterized these broader categories as outside the scope of this filing, but left the door open to future amendments once it has gained experience with the new exception. 
• Interaction with Rule 2111. The new policies and procedures obligation is separate from institutional suitability under Rule 2111(b). Firms may, however, adopt dual-use procedures that address both rules. 

Pending: Regulatory Notice 26-14 Modernization Proposal

In Regulatory Notice 26-14, FINRA requested comment on further changes to Rule 2210, including the following:

• Risk-based review of retail communications. Members would no longer need a principal to approve every retail communication before use. Instead, they would adopt written procedures, appropriate to their business, size, and structure, that identify which categories of retail communications require pre-use approval. The proposal includes a nonexhaustive list of risk factors, such as product complexity, inclusion of performance data, the communication’s medium, and the preparer’s qualifications, including whether finfluencers are involved. When a member does not pre-approve all retail communications, its procedures would need to provide for training, documentation, and surveillance. 
• Social media and AI. The proposal would remove the distinction between static and interactive social media content. FINRA also noted the practical difficulty of applying the pre-use approval requirement to communications generated by AI. 
• Filing requirements. The one-year filing period for new members would begin on the date of the member’s first filing rather than its CRD effective date. Investment company retail communications that include self-published rankings or comparisons would be filed within 10 business days after first use instead of before use. 
• Recommendations. Rule 2210(d)(7) would be replaced with a general prohibition on referring to a past specific recommendation unless the recommendation is presented in a fair and balanced manner, aligning the rule more closely with the Investment Adviser Marketing Rule. 

Any changes FINRA decides to pursue would need to be filed with, and approved by, the SEC before taking effect.

Practical Takeaways

• Watch for the FINRA Regulatory Notice announcing the effective date of the projections amendments, which FINRA has indicated will be published within 60 days after SEC approval and will set an effective date no later than 180 days after publication. Until the amendments take effect, firms should continue to comply with current Rule 2210 and should not rely on the new exception. Also watch for any further guidance FINRA has said it may issue. 
• Before using projections or targets, adopt written procedures that define eligible audiences and specify the distribution channels and controls (for example, investor-category gating and restrictions on public websites and social media). 
• Prepare disclosure templates that cover methodology, assumptions, fee treatment, risks, and reasons results may differ, calibrated to each audience category. 
• Update books-and-records procedures to capture the source of each projection or target, along with supporting records for its assumptions. 
• Set up due diligence protocols for issuer and sponsor projections, which are particularly relevant to private placements, alternative investments, and fund distribution. 
• Sponsors of nontraded REITs, interval funds, nontraded BDCs, and other alternative investment products should assume that projections and targets will remain unavailable in materials prepared for broad retail distribution. Consider maintaining separate materials for eligible audiences, and expect dealer-managers and selling firms to request assumption schedules, model support, and source documentation before agreeing to distribute any projection or target. 
• For dually registered firms, decide whether a single set of relevance procedures and disclosures can serve both Rule 2210 and the Investment Adviser Marketing Rule, and document where the broker-dealer version must differ. 
• Review current pre-use approval, social media, and AI supervision practices in light of the pending Regulatory Notice 26-14 proposal. 

For questions about how amended Rule 2210 or the pending Regulatory Notice 26-14 proposal may affect your communications and supervisory procedures, contact Heath D. Linsky, Mary Katherine Rawls, or any member of Troutman Pepper Locke’s Investment Funds + Investment Management Services team or Capital Markets Practice Group. Troutman Pepper Locke attorneys advise clients on SEC and FINRA regulatory compliance, securities offerings, and marketing and distribution matters.