Financial Industry Regulatory Authority Rule 2210 generally prohibits the use of “predictions and projections” in written communications with the public. FINRA has proposed to dramatically curtail that prohibition.
The proposed amendment to Rule 2110 tries to align with the Investment Advisor Marketing Rule’s treatment of “hypothetical performance.” The FINRA proposal is intentionally more narrow. It only includes projections of performance and targeted returns. It explicitly requires ” a reasonable basis for the criteria used and assumptions made in calculating the projected performance or targeted return and requires that the member retains written records supporting the basis for such criteria and assumptions.” (see page 68) And further requires disclosure of why the projected performance may differ from actual performance.
Like the IA Marketing Rule’s limitation on hypothetical performance, the FINRA proposal on projected performance would not allow widespread distribution. The proposal only permits use of projected performance or targeted returns, where the “intended audience” is appropriate potential investors, given the potential investors’ objectives, investment experience, and knowledge.
Any fund manager who has used a broker-dealer placement agent has likely run into some of this friction on projected performance. If this proposal is adopted, that friction should be reduced.
Sources:
- Proposed Rule Change to Amend FINRA Rule 2210 (Communications with the Public), SR-FINRA-2026-004 (filed Feb. 10, 2026)
- FINRA Rule 2210
- FINRA Proposes to Permit Projected Performance and Targeted Returns in Member Communications from Sidley Austin
- Investment Adviser Marketing Rule