Post on 30-Jan-2016
description
Security Futures Promotional Material
Promotional Material
• Standardized oral presentations
• Publications in newspapers or magazines
• Broadcasts over TV, radio, or other electronic medium
Promotional Material
• Standardized reports, letters, publications
• Any other written material
Security Futures Promotional Material
• Promotional material that specifically mentions security futures
• What it’s not:– Promotional material that only includes
reference to security futures as one of the services offered by the Member
Security Futures Promotional Material
• These rules apply to:– FCMs and IBs who are not NASDR
members– FCMs and IBs who advertise using security
futures promotional material
Case Study
Requirements
• For security futures promotional material:– That which reaches a mass audience– All other promotional material
Mass Audience
• Standard Promotional Material:– TV– Radio– Newspaper/Magazine advertisements– Mass mailings– Web sites or other similar electronic
communications
Mass Audience
• Security futures promotional material can only include:– A general description of the SF being
offered– Name of the Member– Contact information for obtaining SF
disclosure statement
Mass Audience
• A “General Description” includes:– Contract specifications– Margin requirements– How the products will be traded
• Screen-based vs. open outcry
• Futures or Securities account
Mass Audience
• Filing requirements:– Promotional material that reaches a mass
audience must be submitted for NFA review and approval 10 days prior to first use
All Other Promotional Material
• Security futures disclosure statement:– Must accompany or precede all other types
of promotional material
All Other Promotional Material
• Must include:– Name of Member– Date material was first used– A statement that security futures are not
suitable for all customers
All Other Promotional Material
• Must NOT include:– Any statement suggesting that SF positions
may be liquidated at any time
– Any cautionary statement, caveat or disclaimer that:
• Is not legible
• Attempts to disclaim responsibility for the content of the promotional material, or
• Is misleading or otherwise inconsistent with the content of the material
All Other Promotional Material
• Statistical tables, charts or graphs:– Must include the source of the information
All Other Promotional Material
• Claims, comparisons, recommendations or statistics:– Must state that supporting documentation is
available upon request
Case Study
All Other Promotional Material
• Trade recommendations– Past– Future
All Other Promotional Material
• Current trade recommendations must:– Have a reasonable basis for
recommendations
– Disclose any material conflicts of interest in the underlying security
– Provide contact information for obtaining a list of prior recommendations
– Offer to support the recommendation
All Other Promotional Material
• Past trade recommendations:– The SF
– The underlying security
– A derivative thereof
– The SF recommended
All Other Promotional Material
• Past trade recommendations:– Must set forth all recommendations
regarding the same SF within the last year
– The price at the time of the recommendation
– The price or price range within which the recommendation was to be acted upon
– The general market conditions during the period covered
All Other Promotional Material
• Soliciting for SF managed account programs:– The actual past performance of customer’s
trading the program
– If none, must state that the program is unproven and, if applicable, comply with hypothetical restrictions
Testimonials
• Testimonials must be representative of all reasonably comparable accounts
• Promotional material must state that the testimonial is not indicative of future performance or success
• Promotional material must state if the testimonial was paid for
All Other Promotional Material
• Supervisory requirements:– Promotional material must be reviewed and
approved in writing by a security futures principal
– All other aspects of NFA Compliance Rule 2-29 pertain to SF promotional material
QUESTIONS?