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Advertising Compliance Boot Camp: Selected Topics Thursday, October 5 1:45 p.m. – 2:45 p.m. Designed for new compliance and marketing professionals, FINRA panelists provide insights into the core concepts of social media and digital communications, as well as the basic requirements and frequently raised regulatory compliance questions with respect to communications concerning mutual funds, ETFs and variable insurance products. The panel also features sample advertisements and important do’s and don’ts. Moderator: Pramit Das Associate Director - Technology FINRA Advertising Regulation Panelists: Steven Choi Associate Principal Advertising Analyst FINRA Advertising Regulation Joseph George Associate Director FINRA Advertising Regulation Wayne Louviere Manager FINRA Advertising Regulation
I. Introduction
II. Ad review
III. SEC Rules for Investment Company Communications A. Prospectus offer and money market legends; B. Performance standards; and C. Presentation guidelines. D. Examples of communications.
IV. Variable Insurance Products
A. Performance standards; B. Applicable rules; C. Variable annuity “do’s” and “don’ts;” D. Variable life insurance “do’s” and “don’ts;” and E. Hypothetical illustrations
Advertising Compliance Boot Camp: Selected Topics Panelist Bios: Moderator: Pramit Das is Associate Director-Technology of FINRA’s Advertising Regulation Department. In this role, his responsibilities include managing a filings review group; assisting with administration of the filings review program; developing and maintaining the department’s technology needs; providing education to members, FINRA staff and other regulatory staff; and participating in certain rule amendment and rulemaking projects as necessary. He served in the same role at NASD before its 2007 consolidation with NYSE Member Regulation. Prior to joining NASD in 1994, Mr. Das worked for Metropolitan Life Insurance Company and Arthur Andersen & Co. He holds an MBA in Finance from the University of Maryland, College Park, and an MA in Financial Economics from Clemson University, Clemson, South Carolina. He was also Series 7 and 63 registered. Panelists: Steven Choi is Associate Principal Analyst in FINRA’s Advertising Regulation Department. Prior to joining FINRA/NASD in 2006, he worked in the Private Client Management Group at Legg Mason, and as a Financial Advisor in the Global Private Client Group at Merrill Lynch. Mr. Choi holds a bachelor’s degree in Art History from Williams College. Joseph George is Associate Director in FINRA’s Advertising Regulation Department, where he supervises analysts who review communications with the public for compliance with applicable rules. He has been with the department for more than 20 years and has spoken on panels at Advertising Regulation Department Conferences over the past 15 years. Prior to joining FINRA, he worked for New York Life as a registered representative and was a project manager with Computer Sciences Corporation. Mr. George holds a bachelor’s degree in economics from the University of Maryland. Wayne L. Louviere is a manager in the FINRA Advertising Regulation Department, and supervises the activity of a group of analysts that review sales communications filed by member firms. Mr. Louviere joined the Advertising Regulation Department in 2000. Prior to that time, he was a registered representative, after having served 20 years in the U.S. Navy. Mr. Louviere has a bachelor’s degree in business management – finance and a master’s of business administration from the University of Maryland.
The Rocket Technology Fund Provides Opportunities for
Guaranteed High Income and Low Volatility!
By investing in the Rocket Technology Fund, you gain:
• Instant access to the $$$technology$$$ sector,
which provides growth at an unprecedented rate!
• Security, stability, and peace of mind
• 100% exposure to market
• Focus on generating higher alpha
Call 1-888-ROCKETS to request a prospectus for the Rocket Technology Fund. Consider the investment objectives,
risks, charges, and expenses of the Fund carefully before investing. The prospectus contains this and other
information about the Fund. Read the prospectus carefully before investing.
It is important that you carefully read the agreements and disclosures that Rocket Technology provides to you about products offered. While Rocket
Technology strives to ensure that these materials clearly describe the nature of the products offered, please contact Rocket Technology if you need
clarification. Investing in a single-sector mutual fund involves greater risk than investing in a more diversified fund. The fund may invest up to 35% of
its assets in securities of non-U.S. issuers that present risks not associated with investing solely in the United States. In addition, Rocket Distributors,
its affiliates, and its employees are not in the business of providing tax or legal advice. Please seek such advice based on your particular
circumstances from an independent advisor.
Rocket Fund Distributors Member FINRA
Invest in the Rocket Technology Fund and your portfolio value will SKYROCKET!!
Promissory claim
Exaggerated,
promissory assertions
Lacking basis,
balance, clarity
Placement of risk disclosure in legend inhibits understanding
SEC Rule 482 governs communications used prior to delivery of the prospectus.
SEC Rule 34b-1 governs communications used after delivery of the prospectus.
SEC Rule 135a applies to generic communications about investment company securities and therefore, may not refer to a particular fund or security. Such communications may:
describe services/benefits offered by a sponsor/complex;
Contract Inception: March 1, 2013Separate Account Established: January 12, 2005
Average Annual Total Returns Through September 30, 2017(performance reflects maximum contingent deferred sales charge)
Performance returns reflect an initial contract value of $1,000. The performance data quoted represents past performance of the Sub-Accounts. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worthmore or less than original cost. For performance information current to the most recent month end, please call 1-800-888-8888. Past performance does not guarantee future results. Current performance may be lower or higher than the performance data quoted.Performance displayed is net of annual administrative, investment management, and mortality and expenses fees, as well as a declining contingent deferred sales charge (CDSC) of 8%, 7%, 6%, 5%, 4%, 3%, 2%, 1%, 0% over 9 years. The underlying Fund may incur a $30 per year annual contract charge. Please see the latest prospectus for detailed information on fees and charges.There is a 10% federal penalty tax on certain withdrawals of earnings prior to age 59 ½. Earnings are subject to ordinary income tax upon withdrawal.*Since inception returns are provided for portfolios that do not have at least 10 years of performance history as of the date they were included in the separate account.
SEC Rule 482 performance standards apply. Average annual total returns.
Current to the most recent calendar quarter ended.
Must be net of all recurring fees and expenses (e.g., mortality and expense risk charges, annual administrative fees, expenses of the investment options). Annual contract charges can be deducted as a percentage of the average
issued contract value.
Must be net of all non-recurring fees (e.g., sales loads and contingent deferred sales charges).
Keyed off the inception date of the separate account, even if it predates the date of the inception of the contract.
Typically appears in material preceded or accompanied by a current prospectus for the VLI contract and its underlying accounts.
Performance standards of SEC Rule 34b-1 do not apply.
General standards of FINRA Rule 2210 do apply
Performance must reflect, at a minimum, the deduction of all fees and charges applicable at the investment option level.
Identify the fees and charges deducted; identify the fees and charges not deducted; and disclose that the performance would have been significantly lower if all fees and charges had been deducted.
If applicable, include a statement suggesting that investors obtain a personalized performance illustration.
Principal approval: Retail communications must be approved in advance.
Institutional communications and correspondence in accordance with the firm’s supervisory procedures.
Communications used prior to delivery of the Options Disclosure Document (ODD): Retail communications must be filed 10 calendar days prior to use and require FINRA
approval prior to use.
Must provide a source for obtaining a copy of the ODD.
Must be limited to general descriptions of the options being discussed.
Must not contain recommendations, performance, or names of specific securities.
Communications used with the ODD may be filed voluntarily.
Investment Analysis Tool retail communications (except incidental references) must include required disclosures: Describe the criteria and methodology used, including the investment analysis
tool’s limitations and key assumptions;
Explain that results may vary with each use and over time;
If applicable, describe the universe of investments considered, how the investments are selected, explain if and why some securities are favored, and state that other investments may be similar or superior to those being analyzed; and,
Clearly show the hypothetical nature of the results which do not reflect actual results and are not guarantees of future results.
These disclosures required by FINRA Rule 2214(c), should be clear, prominent, and written in narrative form.