About This Chapter
Advertising and Public Communication in the Securities Industry - Chapter Summary
Within this chapter, candidates who are preparing for exams can review information regarding restrictions on advertising and communication, including SEC rules for public communications, advertising, and misleading sales literature . After you have studied this material, you should be able to:
- Interpret FINRA rules 2211, 2212, and 2213
- Relate how the Securities Exchange Act of 1934 created the government agency Securities Exchange Commission
- Define continuing disclosure, and exemptions from continuing disclosure
- Explain the prohibition on misleading sales literature from investment companies
- Discuss Municipal Securities Rulemaking Board Rule G-21, including its provisions for professional advertising
- Analyze product specific advertisements for various securities, including options, government securities, and collateralized mortgage obligations
The lessons contained in this chapter are both interesting and informative, and will help test-takers to master the material that they'll need to know to succeed on the exam. You can use the chapter on any device, which means that you can study wherever you are.
1. Communications With the Public: Types, Standards & FINRA 2210
Firms involved in the investment industry have to be careful of all their public communications to the public to ensure that the firm and its employees stay in compliance with FINRA rules.
2. Communications With the Public: Variable Life Insurance & Annuities
This lesson discusses FINRA Rules 2211 and 2232. These rules outline the conditions that need to be satisfied when communicating with the public regarding variable life insurance, variable annuity, and deferred variable annuity products.
3. Use of Investment Companies' Rankings in Retail Communications
Many websites, brokerage firms, and rating agencies rank and compare investment companies. A high ranking from a respected analyst can drive sales and gain customers. In this lesson, you will learn the rules investment companies must follow when communicating these rankings to their retail clients.
4. FINRA Requirements for the Use of Bond Mutual Fund Volatility Ratings
FINRA oversees all investment brokers and dealers. One of its functions is to make rules regulating broker/dealer activities and behavior. Rule 2213 governs the use of bond mutual fund volatility ratings in public communications.
5. SEC Rules & Regulations: Public Communication & Advertising
The Securities Act of 1933 was the first attempt by congress to regulate the buying and selling of securities and the communication about them. Let's explore its major provisions.
6. Investment Company Advertising: SEC Rules & Regulations
The Securities Act of 1933 is a federal law protecting investors. Rules are established for registering securities with the SEC and against misleading sales advertisements. Rules 156, 482, and 498 are examined.
7. Securities Exchange Act of 1934: Rules
The Securities Exchange Act of 1934 created the Securities and Exchange Commission, a government agency. This lesson explains how the SEC writes rules to protect investors and create confidence in the securities industry.
8. Continuing Disclosure: Definition, Requirements & Exemptions
In this lesson, we'll review continuing disclosure requirements as outlined in rule 15c2-12 of the Securities Exchange Act of 1934. We'll also review exemptions to the rule.
9. Misleading Sales Literature & The Investment Company Act of 1940
The Investment Company Act of 1940 was passed to provide protection for investors purchasing mutual funds. Rule 34b-1 defines regulations for misleading sales literature for securities. Learn more in this lesson.
10. MSRB Rule G-21: Definition, Purpose & Overview
The Municipal Securities Rule Board (MSRB) Rule G-21 was enacted to promote fair dealing and 'good faith' by dealers selling municipal securities. Its definition, purpose, and an overview are discussed.
11. Financial Options-Related Communications & Disclosures in Advertising
This lesson briefly describes basic concepts of options and then goes into detail about the options disclosure document and requirements for setting up options accounts and communicating with clients. An opening scenario also provides an example of why it is important to follow these rules.
12. Advertisements for Municipal & Government Securities: Regulations & Disclosures
This lessons covers regulation of municipal government securities and other rules put in effect to protect a customer's investment assets. We'll cover SEC Rule 15c2-12 and 15c3-3 (Customer Protection Rule).
13. Collateralized Mortgage Obligations: Advertisements & Disclosures
This lesson covers the advertisement and communication of information to investors regarding collateralized mortgage obligations. Specifically, FINRA Rule 2216 is discussed.
14. Equity & Debt Research Reports: Publication & Distribution
To protect investors from misleading, biased, or deceptive information, there are rules governing the creation and distribution of equity and debt research. In this lesson, learn about those rules and how they apply to investment professionals.
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Other chapters within the Series 7 Exam: Study Guide & Practice course
- The New Issues Market
- New Issue Regulations in the Securities Industry
- Brokerage Account Types & Restrictions
- Retirement Plans & Tax-Advantaged Accounts
- Handling Customer Investment Information & Discretionary Accounts
- Obtaining Supervisory Approvals for Investment Accounts
- Analyzing Customer Investment Profiles
- Analyzing Customer Financial Statements
- Understanding Equity Securities
- Tax Treatment of Equity Securities Transactions
- Packaged Investment Products
- Variable Life Insurance & Annuities
- Real Estate Investment Trusts
- Direct Participation Programs
- Understanding Options in Investing
- Debt Securities
- Investing in Corporate Bonds
- Municipal Securities
- Municipal Securities Analysis & Regulations
- Registered Hedge Funds
- Asset-Backed Securities
- U.S. Government Agency Securities
- Investment Product Disclosures
- Customer Updates & Record Retention
- Customer Transactions & Confirmations
- Transactional Delivery Obligations & Settlement Procedures
- Investment Disputes & Customer Complaints
- Addressing Margin Issues