IAA Urges FINRA to Harmonize Rule 2210 with Marketing Rule
July 28, 2026
Via Electronic Transmission
Vanessa A. Countryman
Secretary
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-1090
Re: Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Partial Amendment No. 1 to Proposed Rule Change to Amend FINRA Rule 2210 (Communications with the Public) [Release No. 34-105845; File No. SR-FINRA-2026-004]
Dear Ms. Countryman:
The Investment Adviser Association (IAA)[1] appreciates the opportunity to comment on Partial Amendment No. 1[2] to the proposed rule change to amend FINRA Rule 2210 (Proposal)[3] filed by the Financial Industry Regulatory Authority (FINRA) on June 30, 2026 in response to comment letters received on the initial rule filing, including the IAA’s letter dated March 17, 2026.[4] The Partial Amendment would impose an additional recordkeeping requirement, eliminate redundancies with Rule 2210’s general content standards, and more closely align Rule 2210 with the standards governing hypothetical performance adopted by the Securities and Exchange Commission (Commission) in Rule 206(4)-1 (Marketing Rule) under the Investment Advisers Act of 1940.[5]
The IAA continues to support FINRA’s efforts to harmonize the standards in Rule 2210 governing performance targets and projections to similar standards in the Marketing Rule, and in particular supports FINRA’s decision to eliminate the reasonable basis and express disclosure requirements from the Proposal. The further alignment of regulatory standards for investor-facing communications will reduce investor confusion,[6] maintain appropriate investor protection safeguards, streamline the sharing of performance information by financial market participants, and reduce compliance costs for affected firms by allowing such firms to leverage existing compliance infrastructure developed to satisfy the Marketing Rule.[7]
However, the IAA urges FINRA to further align Rule 2210 with the Marketing Rule by closing the remaining gaps between the Proposal and the Marketing Rule. Addressing the remaining fundamental inconsistencies between these two standards would help to ensure that investors receive consistent and meaningful information in performance-related communications.[8]
By excluding model, backtested, and other forms of hypothetical performance from the Proposal, FINRA would preserve a material divergence between the forms of hypothetical performance expressly permitted under the Marketing Rule and those addressed by Rule 2210. This approach is contrary to FINRA’s own stated objective of increased regulatory harmonization.[9] While the IAA acknowledges that FINRA did not foreclose future potential amendments to harmonize Rule 2210 with the Marketing Rule by addressing these performance categories,[10] we encourage FINRA to address the issue now rather than prolong the confusion and disparate treatment of investors that would result under the current version of the Proposal.[11]
In the event that FINRA does not elect to fully harmonize Rule 2210 with the Marketing Rule’s definition of hypothetical performance, the IAA respectfully requests that, at a minimum, FINRA permit member firms to present hypothetical performance that is derived from an adviser’s actual investments consistent with the standards set forth in the Proposal. This would include, for example, extracts from composites (i.e., carve outs),[12] composites of extracts, and track records based on the aggregation of actual positions across various accounts and/or funds, which are derived from actual investment decisions and outcomes and do not present a meaningful risk of investor misunderstanding if subject to the same controls and conditions that FINRA proposes to apply to performance targets and projections.
The IAA also understands that FINRA elected not to address its prior guidance on the calculation and presentation of internal rates of return (IRR) in the amended Proposal but acknowledged commenters’ concerns on the matter and would consider whether updated guidance would be warranted. Given that FINRA’s existing position on IRR is inconsistent with the Marketing Rule and is based, at least in part, on the position that IRRs represent performance projections under current Rule 2210(d)(1)(F), the IAA strongly supports the issuance of updated interpretive guidance regarding the treatment of IRR under Rule 2210, including by clarifying that the IRR of actual investments or investment programs, even when based in whole or in part on the values of unrealized positions, is not a projection of performance for purposes of Rule 2210.
* * *
We appreciate your consideration of our comments and are happy to provide any additional information that may be helpful. The IAA is also happy to engage with FINRA on other aspects of Rule 2210, including the potential interpretive guidance and future rulemaking referenced in FINRA’s Response Letter. Please do not hesitate to contact the undersigned if we can be of further assistance.
Respectfully,
/s/ Gail C. Bernstein
Gail C. Bernstein
General Counsel and Head of Public Policy
/s/ Sanjay Lamba
Sanjay Lamba
Associate General Counsel
cc: The Honorable Paul S. Atkins, Chairman
The Honorable Hester M. Peirce, Commissioner
The Honorable Mark T. Uyeda, Commissioner
Brian Daly, Director, Division of Investment Management
Jamie Selway, Director, Division of Trading and Markets
[1] The IAA is the leading organization dedicated to advancing the interests of fiduciary investment advisers. For nearly 90 years, the IAA has been advocating for advisers before Congress and U.S. and global regulators, promoting best practices and providing education and resources to empower advisers to effectively serve their clients, the capital markets, and the U.S. economy. Our members range from global asset managers to the medium- and small-sized firms that make up the majority of our industry. Together, the IAA’s member firms manage more than $57 trillion in assets for a wide variety of individual and institutional clients, including pension plans, trusts, mutual funds, private funds, endowments, foundations, and corporations. For more information, please visit www.investmentadviser.org and see the IAA’s Investment Adviser Industry Snapshot.
[2] Notice of Partial Amendment No. 1 to Proposed Rule Change to Amend FINRA Rule 2210 (Communications with the Public), File No. SR-FINRA-2026-004 (June 30, 2026), https://www.finra.org/rules-guidance/rule-filings/sr-finra-2026-004.
[3] 91 Fed. Reg. 9308 (Feb. 25, 2026) (Proposing Release).
[4] See Letter from the IAA to the Commission re: Proposed Rule Change to Amend FINRA Rule 2210 (Communications with the Public) (Mar. 17, 2026), https://www.sec.gov/comments/sr-finra-2026-004/srfinra2026004-727988-2271277.pdf.
[5] 17 CFR §275.206(4)-1.
[6] As FINRA notes, “the proposed rule change would reduce confusion for investors who currently may receive differing information depending on the regulated nature of their intermediary (such as RIAs) or are prohibited from receiving information that could be useful to their investment decision-making process.” Proposing Release at 9314.
[7] Proposing Release at 9310.
[8] The IAA has a strong interest in the Proposal because FINRA Rule 2210 directly affects how investment advisers communicate performance-related information when those communications are distributed through broker-dealer intermediaries. Investment advisers frequently rely on FINRA member firms to act as placement agents or distributors for funds, and many firms are dually registered as or operate affiliated broker-dealers and investment advisers. As a result, differences between Rule 2210 and the Marketing Rule can affect investment advisers’ communications with investors and create operational complexity for firms subject to both regulatory regimes.
[9] Proposing Release at 9315.
[10] See letter from Joseph P. Savage, Vice President and Associate General Counsel, FINRA, to Vanessa Countryman, Secretary, U.S. Securities and Exchange Commission (June 30, 2026) (Response Letter), https://www.finra.org/rules-guidance/rule-filings/sr-finra-2025-003.
[11] See generally Public Comment letters to the Proposing Release; Public Comment letters to 88 Fed. Reg. 82482 (Nov. 24, 2023), https://www.sec.gov/comments/sr-finra-2023-016/srfinra2023016.htm (citing detrimental effects of divergent standards between FINRA Rule 2210 and the Marketing Rule for hypothetical performance).
[12] Although viewed as hypothetical performance under the Marketing Rule, carve outs are treated as actual performance under the Global Investment Performance Standards (GIPS®).