FINRA's Position On Pre-Inception Index Performance Data
May 7, 2013, 5:40 PM EDT
Law360, New York (May 7, 2013, 5:40 PM EDT) -- On April 22, 2013, the Financial Industry Regulatory Authority Inc. issued an interpretative letter regarding the use of pre-inception index performance (PIP) data for exchange-traded products (ETPs). The letter formalizes a position with respect to the use of PIP data (sometimes referred to as “hypothetical” or “backtested” index data) in communications with institutional investors.
All communications by FINRA-member broker-dealers are subject to FINRA Rule 2210, which imposes, among other things, content standards, internal approval, review and recordkeeping requirements, and possible filing obligations with FINRA’s Advertising Regulation...