United States: FINRA Opens the Door to Projected Returns
By Thoreau A. Bartmann, Lance C. Dial, Pamela A. Grossetti, and Pablo J. Man
On 15 October 2026, the Securities and Exchange Commission approved amendments to FINRA Rule 2210 that will permit broker-dealers to include projected performance and targeted returns in certain investor communications.1
Background and Implications
Rule 2210 historically prohibited broker-dealers from communicating projected performance or targeted returns, subject to narrow exceptions. This created particular difficulties for private fund managers that routinely use projected internal rates of return (IRRs), target multiples, and other forward-looking measures to explain investment opportunities. The prohibition also created a regulatory disconnect between FINRA Rule 2210 and Rule 206(4)-1 under the Investment Advisers Act of 1940, as amended (the “Marketing Rule”), which permits investment advisers to advertise projections and other forms of “hypothetical performance,” subject to specified conditions.
What’s Allowed
The amended rule more closely aligns with the Marketing Rule by permitting broker-dealers to communicate projected performance or targeted returns for securities, portfolios and investment strategies, subject to certain conditions:
Investor Audience
Firms must adopt policies and procedures reasonably designed to ensure projections are relevant to the likely financial situation and investment objectives of the intended audience. FINRA expects these communications to be directed primarily to institutional and other sophisticated investors, rather than general retail audiences.
Disclosures
Communications must provide sufficient information concerning the criteria and assumptions underlying projections, together with the risks and limitations of relying on them.
Recordkeeping
Firms must retain information identifying the source of projected performance or targeted returns.
Once implemented, the amendments will allow broker-dealers to distribute more consistent offering materials across distribution channels, including projected IRRs for private equity, private credit, and other alternative investment strategies. However, the amendments do not extend to all forms of performance information addressed by the Marketing Rule, including backtested, model, related or extracted performance. Moreover, compliance with the Marketing Rule will not necessarily establish compliance with Rule 2210.
FINRA will announce the implementation date in a subsequent Regulatory Notice.
1Order Approving a Proposed Rule Change, as Modified by Partial Amendment No. 1, to Amend FINRA Rule 2210 (Communications with the Public), SEC Rel. No. 34-106675 (Oct. 15, 2026) available at https://www.sec.gov/files/rules/sro/finra/2026/34-106675.pdf.