FINRA staff concluded that member firms may use "Related Performance Information" in institutional communications concerning variable annuity and life insurance contracts. FINRA staff cautioned that providing Related Performance Information in communications with retail investors is not allowed under Rule 2210.
FINRA staff provided interpretive guidance on FINRA Rule 2210, which imposes certain limits on institutional communications. Under the rule, "institutional investors" are defined as those that function as financial intermediaries. In a letter responding to a Jackson National Life Distributors LLC ("JNLD") request for guidance to communicate the performance of certain related funds, FINRA staff concluded that JNLD's use of such information complies with Rule 2210. This decision is consistent with FINRA Interpretive Letters from 2003 and 2015.
Commentary / Steven Lofchie
The reason that sophisticated investors wish to obtain "related performance information" is that it is useful in making an investment decision. Accordingly, FINRA should re-examine its strict policy against making this information available to retail investors and allow the provision of the information where it would not be misleading.
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