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INVESTMENT COMPANY ACT OF 1940

The Investment Company Act of 1940 regulates companies that are in business to invest or reinvest money for the benefit of their investors. The Investment Company Act sets forth registration requirements for the three types of investment companies. They are:

• Management investment companies

• Unit investment trusts (UITs)

• Face-amount companies (FACs)

RETAIL COMMUNICATIONS/COMMUNICATIONS WITH THE PUBLIC

Member firms will seek to increase their business and exposure through the use of both retail and institutional communications. Strict regulations are in place in order to ensure that all communications with the public adhere to industry guidelines. Some communications with the public are available to a general audience and include:

• Television/radio

• Publicly accessible websites

• Motion pictures

• Newspapers/magazines

• Telephone directory listings

• Signs/billboards

• Computer/Internet postings

• Videotape displays

• Other public media

• Recorded telemarketing messages

Other types of communications are offered to a targeted audience. These communications include:

• Market reports

• Password-protected websites

• Telemarketing scripts

• Form letters or emails (sent to more than 25 people)

• Circulars

• Research reports

• Printed materials for seminars

• Option worksheets

• Performance reports

• Prepared scripts for TV or radio

• Reprints of ads or sales literature

FINRA RULE 2210 COMMUNICATIONS WITH THE PUBLIC

FINRA Rule 2210 replaces the advertising and sales literature rules previously used to regulate member communications with the public. FINRA Rule 2210 streamlines member communication rules and reduces the number of communication categories from six to three. The three categories of member communication are:

1. Retail Communication

2. Institutional Communication

3. Correspondence

 
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