When an investment banker takes a deal to market, the opportunity may be presented in many forms — promotional emails, a Confidential Information Memorandum (CIM), pitch deck, investor fact sheet, or a combination of these materials.
While FINRA and SEC rules impose different requirements for communications sent to retail versus institutional investors, the best broker-dealers apply one high standard.
Why This Matters
Even when your intent is to target only institutional investors, marketing materials can inadvertently reach retail investors — for example, if a contact forwards a deck or if an email is misdirected. Without a review process, this unplanned exposure can create legal and regulatory risks for both you and your firm.
Regulatory actions in recent years highlight that FINRA and the SEC will hold firms accountable for misleading, exaggerated, or incomplete statements regardless of whether the initial target audience was institutional. In 2022 alone, FINRA reported over $21 million in fines related to communications with the public, underscoring that marketing oversight is not a formality — it’s a risk control measure.This does not include legal damages levied against investment bankers and broker dealers for no taking that small extra step to applying the appropriate disclosures and writing the documents in an honest and non-misleading manner.
Understanding FINRA Rule 2210 – Communications with the Public
FINRA Rule 2210 sets the standards for all public communications, covering pitch decks, CIMs, offering memoranda, websites, fact sheets, and promotional emails.
Here’s a quick breakdown:
- Retail Communications — Sent to more than 25 retail investors in any 30-day period:
Must be approved in writing by a registered principal before first use or filing. - Institutional Communications — Sent only to institutional investors (private equity, family offices, strategics):
Principal pre-approval is not required by rule, but leading firms still review these materials for accuracy, balance, and compliance. - Correspondence — Sent to 25 or fewer retail investors in any 30-day period:
No pre-approval required, but subject to post-use review and supervision.
In some cases, retail communications about certain products — including some private placement memoranda intended for individual investors — must also be filed with FINRA’s Advertising Regulation Department within specific timelines.
The IIB Standard
At Independent Investment Bankers Corp. (IIB), we require principal approval for any marketing document intended for more than 25 investors — whether retail or institutional. Even for institutional-only materials, our compliance team reviews to confirm:
- Proper disclaimers, including forward-looking statement language
- No exaggerated or misleading claims
- A balanced presentation of risks and returns
- Adherence to FINRA Rule 2210 content standards and SEC anti-fraud provisions
This review process is fast — typically one hour or less — and will not delay your deal process.So why not do it?
Why This Should Matter to You
A broker-dealer that reviews all marketing materials, even when not strictly required, is:
- Prioritizing investor protection
- Reducing your legal exposure
- Protecting your professional reputation
If you are not affiliated with a broker-dealer, or if your current firm does not require this level of review, you should still adopt these best practices yourself. Regulatory fines, reputational harm, and lost investor confidence are costly risks that can be avoided with a relatively simple process.
The Bottom Line
Best practice for any investment banker or broker-dealer is to follow this higher standard. It’s not just about compliance — it’s about professional discipline, investor trust, and protecting both you and your firm from avoidable problems.
At IIB, we believe that strong compliance is not an obstacle to business — it’s a competitive advantage.
