SEC Approves Change to FINRA Rule 2210 Allowing Projected Investment Returns in Marketing Materials

A significant change to FINRA’s communications rules will give broker-dealers greater flexibility to include projected investment performance and targeted returns in marketing materials.

On October 15, 2026, the Securities and Exchange Commission (SEC) approved amendments to FINRA Rule 2210 that will permit broker-dealers to include projected investment performance and targeted returns in communications with the public, subject to certain conditions.

Previously, FINRA Rule 2210 generally prohibited broker-dealers from distributing marketing materials containing projected investment returns, including targeted internal rates of return (IRRs), multiples on invested capital (MOICs), and other forward-looking investment performance metrics, subject to limited exceptions.

The amendments represent a meaningful change for investment bankers and private placement professionals, particularly those distributing issuer-prepared marketing materials to institutional and sophisticated investors.

What Is Changing?

Once the amendments become effective, FINRA member firms will be permitted to include projected investment performance and targeted returns in certain communications, provided they satisfy specific requirements. These include:

• Appropriate Investor Audience: Firms must establish and maintain written policies and procedures reasonably designed to ensure projections are relevant to the likely financial situation and investment objectives of the intended audience, including consideration of investors’ financial expertise and ability to evaluate the projections.

• Disclosure of Material Assumptions: Marketing materials must provide sufficient information for investors to understand the criteria and assumptions underlying projected returns, such as anticipated investment periods, growth assumptions, exit valuations, and other material factors.

• Fees and Expenses: Communications must disclose whether projected returns are presented gross or net of anticipated fees and expenses, including relevant limitations or exclusions.

• Risks and Limitations: Firms must provide appropriate disclosures explaining the risks and limitations of the projections, including material factors that could cause actual investment performance to differ from projected results.

• Fair and Balanced Communications: All materials must continue to comply with FINRA Rule 2210’s general standards prohibiting misleading, exaggerated, or unwarranted claims.

Importantly, the amendments do not automatically permit all hypothetical performance presentations, nor do they eliminate broker-dealers’ existing supervisory obligations.

What Does This Mean for Britehorn Representatives?

For Britehorn Securities’ registered representatives, the amendments will create additional flexibility when marketing private placements and other investment opportunities involving projected investor returns.

However, the amendments are not yet effective, and Britehorn’s existing marketing review requirements remain in place until FINRA announces an implementation date and the firm updates its supervisory procedures. Once FINRA announces the effective date, Britehorn Securities will notify its registered representatives of the implementation timeline and provide detailed guidance regarding the firm’s updated policies and procedures, required documentation, and any additional requirements necessary to comply with the amended rule. We already know we will have 4 requirements all registered representatives will need to satisfy:

1. Ensuring communications only go to institutional investors

2. Adequately disclosing all assumptions and calculation methodology, including whether returns are gross or net of anticipated fees and expenses

3. Including more robust, customized disclosures regarding risk

4. Reviewing and submitting all fincancial models and other calculations used to arrive at any projections

The SEC’s approval marks an important step toward modernizing broker-dealer communications standards while maintaining appropriate investor protections — and we're excited to get it implemented!