In response to the question, “Do federal securities laws permit mutual funds to use “broker-only” marketing materials, which include more technical complexity than marketing materials provided to the public?” McCabe told Ignites, “Broker-only materials may include a wide variety of performance information, including for similarly managed funds and for one or more of an advisor’s similarly managed accounts. Broker-only materials are generally subject only to the antifraud provisions of the federal securities laws. However, other standards, including Financial Industry Regulatory Authority (Finra) rules or an advisor’s claims of compliance with Global Investment Performance Standards, could potentially be implicated and, therefore, be subject to legal or compliance review. Broker-only materials should be clearly identified as being for broker use only so that they are not required to be filed with Finra or the Securities and Exchange Commission.”
McCabe added, “In preparing broker-only materials, care should also be taken to ensure that the more detailed information typically contained in such materials is consistent with the fund’s portfolio holdings disclosure policies.”
Stay Up To Date with Ropes & Gray
Ropes & Gray attorneys provide timely analysis on legal developments, court decisions and changes in legislation and regulations.
Stay in the loop with all things Ropes & Gray, and find our more about our people, culture, initiatives and everything that’s happening.
We regularly notify our clients and contacts of significant legal developments, news, webinars and teleconferences that affect their industries.