RCA - November 1996 - Ask The Analyst - Minimum Time for Radio/TV Disclosures

Q: What is the minimum amount of time that disclosure information must appear on a screen during a television advertisement or video presentation?

A: NASD Rules do not specify a time limit or method of communicating disclosure. Members must ensure their communications present material information (for example, risk factors, costs, or conflicts of interest) in a clear and easily understood manner. In the case of a television commercial, it is unrealistic to assume that the viewer can read an on-screen footnote at the same time a sales message is presented in the audio and video portions of the advertisement. Therefore, written disclosure may be inadequate unless it is the sole information displayed on screen, the type is easily read, and it appears long enough to be reasonably read by the average viewer. Members may need to disclose material information as part of the audio portion of the commercial in addition to relying on on-screen disclosure.

Members should note that there are three special situations to consider:
  • NASD Rules require certain disclosures in the audio portion of CMO
  • Radio and television commercials.
  • SEC Rule 482 specifies that the offer of a prospectus be conspicuous in mutual fund advertising.
  • SEC Rules require that all advertisements for money market mutual funds contain prominent disclosures regarding their lack of guarantees and risks.