The SEC is now considering a significant update to FINRA's communications rules that could reshape how broker-dealers discuss future investment performance with investors.

For years, FINRA Rule 2210 has largely prohibited broker-dealers from including projected performance or targeted returns in communications with the public. Investment advisers, however, have had greater flexibility under the SEC's Marketing Rule, creating a regulatory mismatch between the two industries.

That gap may soon narrow.

On July 2, 2026, the SEC published FINRA's Partial Amendment No. 1 to its proposed amendments to Rule 2210, inviting public comment before deciding whether to approve the changes. The proposal would create a carefully tailored exception allowing broker-dealers to present performance projections and targeted returns—provided they satisfy specific investor-protection requirements.

What Would Change?

If approved, FINRA members could include projected performance or targeted returns relating to:

• Individual securities

• Securities portfolios

• Asset allocations

• Other investment strategies

This would mark one of the most significant changes to FINRA's communications rules in years, particularly for firms marketing private funds, alternative investments, structured products, and sophisticated investment strategies.

Rather than maintaining a near-complete prohibition, the proposal recognizes that projections can provide meaningful information when accompanied by appropriate safeguards.

Investor Protection Remains the Priority

The proposal does not permit firms to make speculative or unsupported performance claims.

Instead, broker-dealers would be required to adopt written supervisory policies and procedures reasonably designed to ensure that projected performance is appropriate for the intended audience. Firms must also provide sufficient information explaining:

• The assumptions and methodology used to develop the projections;

• The limitations of those projections; and

• The risks investors should consider before relying on them.

Importantly, FINRA's Partial Amendment No. 1 removes some of the more prescriptive disclosure requirements contained in the original proposal. Rather than requiring firms to expressly disclose whether projections are net of anticipated fees or to specifically explain every reason actual performance may differ, FINRA instead relies more heavily on Rule 2210's existing "fair and balanced" communications standard to govern these presentations.

Why This Matters

The proposal reflects a broader effort to harmonize the regulatory treatment of broker-dealers and registered investment advisers.

Today, advisers operating under the SEC's Marketing Rule may present hypothetical performance in circumstances where broker-dealers often cannot distribute the same materials without modification. This creates operational inefficiencies, particularly for firms involved in private fund distribution and institutional capital raising.

If adopted, the rule would reduce that inconsistency while continuing to require firms to maintain robust compliance controls and supervisory oversight.

Compliance Considerations

Broker-dealers should not view the proposal as a relaxation of compliance obligations.

Instead, firms should begin evaluating whether their existing supervisory frameworks can support the use of projected performance should the rule ultimately be approved. Areas worth reviewing include:

• Written supervisory procedures governing marketing materials;

• Documentation supporting assumptions and methodologies;

• Internal approval workflows for projections;

• Recordkeeping practices; and

• Coordination with Regulation Best Interest obligations when recommendations are made to retail investors.

Although the proposal may provide greater marketing flexibility, firms will still be expected to demonstrate that communications are fair, balanced, and appropriately tailored to their intended audience.

Looking Ahead

The SEC has not yet approved the proposal. Instead, it has opened additional proceedings and is requesting public comment before making a final determination. The outcome could meaningfully influence how broker-dealers communicate expected investment outcomes and align FINRA's rules more closely with the SEC's existing framework for investment advisers.

For firms operating in securities, investment management, private funds, and capital markets, this is a regulatory development worth monitoring closely. If adopted, the changes could provide new opportunities for investor communications while reinforcing the importance of thoughtful compliance and disclosure practices.

Learn More

SEC Release

This blog post is for informational purposes only and is not legal advice. Please consult with a Launch Legal attorney regarding your specific situation.