Targeted Examination Letters

June 2010

 

Re: Spot-Check of Non-Investment Company Exchange Traded Products Communications

 

NASD Rules 2210(c)(7) and 2211(c) state that each FINRA firm's advertisements, sales literature and institutional sales literature are subject to a periodic spot-check procedure. Pursuant to this procedure and in accordance with FINRA Procedural Rule 8210, the Advertising Regulation Department requests that you provide the following:

 

  1.  All advertisements, sales literature, and institutional sales material as defined in NASD Rule 2210(a) and 2211(a), used from November 1, 2009 through May 31, 2010, for the purpose of promoting non-investment company exchange traded products (“ETPs”), such as exchange traded funds that are not registered as investment companies under the Investment Company Act of 1940 and exchange traded notes. This request is for general marketing communications as well as those on behalf of specific ETPs. Please note that this request excludes communications that have already been filed with the Advertising Regulation Department. Please provide both paper and electronic copies of the communications.

     
  2.  A numbered tabular list identifying each communication provided pursuant to item 1 of this letter. Please also include the dates of distribution of each communication, the manner in which it was distributed, and, if applicable, an internal reference number. We request that this list be provided to us in paper and electronic format.

     
  3. Evidence that each advertisement or item of sales literature provided pursuant to item 1 of this letter received written approval by a registered principal prior to use, as required by NASD Rule 2210(b)(1). State the name and title of the registered principal who gave the approval and the date that the approval was given. If the institutional sales material was approved, please provide similar documentation of such approvals.

     
  4. The offering document for any specific ETPs discussed in the communication submitted pursuant to item 1 of this letter.

     
  5. The portion of your firm’s written supervisory procedures concerning the production, approval and distribution of ETPs communications in effect during the subject time period (November 1, 2009 through May 31, 2010).

     
  6. The completed “RESPONSE TO SPOT-CHECK REQUEST” form attached to this letter.
     

 

Please provide the information noted in items 1 through 6 no later than July 6, 2010.

 

Thank you for your cooperation.

 

Response to Spot-Check Request (PDF 17 KB)