# SEC clears FINRA change letting brokers show projected returns

URL: https://www.financialadvsr.com/article/sec-clears-finra-change-letting-brokers-show-projected-2348fc
Published: October 17, 2026
By: Theo Marsh, Regulation Correspondent
Section: Regulation
Publisher: Financial ADVSR (https://www.financialadvsr.com)

The SEC approved a FINRA amendment that would allow broker-dealers to market projected performance, though the change cannot be used until FINRA sets an effective date.

AdvisorHub reported that the Securities and Exchange Commission has approved a change to FINRA's communications rule that would let broker-dealers present projected returns in their marketing, bringing brokers closer to the treatment investment advisers have had for several years. The change amends FINRA Rule 2210, which governs how member firms communicate with the public.

According to the SEC order, dated October 14, 2026, the commission approved FINRA's proposed rule change. A separate reference points to an October 15 order for the same exception, which conflicts with the October 14 date, so readers should check the SEC record. Under the current rule, broker-dealers generally may not make predictions or projections of performance, subject to a few exceptions. The amendment adds an exception that allows member firms to market performance, including projections, provided they meet investor-protection requirements. Altswire reported that brokers cannot yet use the new exception, because FINRA has not yet fixed the date the change will apply from, which it will announce in a Regulatory Notice.

The regulatory timeline is documented in the filing record. FINRA filed the proposal with the SEC on February 10, 2026, and the Federal Register published the proposed amendments on February 25, 2026. The SEC had until April 13, 2026 to act, with extensions of up to 90 days available. Mintz indicated that the final text no longer carries a separate reasonable basis obligation from the February draft, and that the disclosures on whether projections are net of fees and why results may diverge from projections were removed.

Fee treatment is unclear across the material reviewed. AdvisorHub reported that brokers could show projections without netting out fees. This article does not resolve that difference, and readers should check the final rule text before relying on either account.

Limits on the exception also matter. Investment Law Watch reported that the exception leaves out backtested and model performance, which the SEC Marketing Rule addresses for advisers. The outlet also reported that FINRA expects these communications to go mainly to institutional and sophisticated investors rather than general retail audiences.

The change has a long history. Mintz said advisers gained the ability to show projected and targeted returns under the SEC Marketing Rule in 2022, while broker-dealers have remained barred from doing so. An earlier FINRA proposal from 2023 would have limited projections to institutional and qualified-purchaser audiences. InvestmentNews reported that qualified purchasers under that version needed $5 million or more in investible assets, an investor threshold rather than a firm's assets under management.

Industry groups SIFMA and ICI publicly supported the 2026 proposal but urged FINRA to move closer to the Marketing Rule, Mintz reported. Before the SEC acted, law firms advised broker-dealers to keep following the existing Rule 2210, according to Legay Law. According to its own website, FINRA operates as a self-regulatory organisation registered with the SEC, overseeing member firms from outside government. According to Wikipedia, the organisation came into existence in 2007 when the regulatory, enforcement and arbitration arms of the NASD and the New York Stock Exchange were brought together.

What comes next depends on FINRA. Until it issues a Regulatory Notice setting the effective date, broker-dealers should continue to operate under the existing rule. Compliance teams are likely to watch the final text closely, particularly on fee netting and on the audience limits.

Key facts:
- The SEC order approving FINRA's proposed rule change is dated October 14, 2026, according to the SEC order.
- FINRA filed the proposal with the SEC on February 10, 2026, according to regulatory records cited in research notes.
- The Federal Register published the proposed amendments on February 25, 2026.
- Qualified purchasers under FINRA's 2023 proposal needed $5 million or more in investible assets, according to InvestmentNews.

Why it matters: For advisors at broker-dealers, the amendment could change what performance material their firms can put in front of clients once it takes effect, but the timing is not yet set. Compliance teams will need to track the effective date and the final text, especially the fee-netting question and the expected focus on institutional and sophisticated investors.

Sources:
- AdvisorHub: https://www.advisorhub.com/brokers-may-tout-performance-projections-same-as-rias-sec-says/
- sidley.com: https://www.sidley.com/en/insights/newsupdates/2026/02/finra-proposes-to-permit-projected-performance-and-targeted-returns-in-member-communications
- investmentlawwatch.com: https://www.investmentlawwatch.com/2026/10/16/united-states-finra-opens-the-door-to-projected-returns/
- legayelaw.com: https://www.legayelaw.com/can-broker-dealers-and-rias-use-projected-returns-without-violating-sec-and-finra-rules/
- federalregister.gov: https://www.federalregister.gov/documents/2026/02/25/2026-03705/self-regulatory-organizations-financial-industry-regulatory-authority-inc-notice-of-filing-of-a
- investmentnews.com: https://www.investmentnews.com/practice-management/finra-performance-advertising-proposal-helps-it-keep-pace-with-sec-marketing-rule/246001