FINRA is considering significant changes to how broker-dealers review and supervise retail communications.

Under a proposal outlined in Regulatory Notice 26-14, firms could move away from the current requirement that a qualified principal approve most retail communications before use. In its place, firms would establish risk-based procedures for determining which communications require preapproval.

The proposal is intended to account for changes in social media, artificial intelligence, and the growing volume of communications firms produce. Comments are due September 11, 2026, and the proposed changes are not yet effective.

A Risk-Based Review Process

FINRA Rule 2210 generally defines a retail communication as a written communication distributed or made available to more than 25 retail investors within a 30-day period.

Currently, a qualified principal must approve most retail communications before they are used or filed with FINRA. The proposal would give firms more flexibility to determine which communications require that level of review.

Firms would instead need written procedures appropriate to their business, size, and structure. Those procedures would identify higher-risk communications requiring principal preapproval and establish other review methods for lower-risk content.

When determining the appropriate level of oversight, firms could consider:

  • The complexity of the product or service
  • The experience of the person preparing the communication
  • Whether it includes a recommendation or promotes a product
  • Whether it contains performance data, rankings, or comparisons
  • Its intended audience and distribution method
  • The firm’s history of communication-related concerns

The change could allow firms to apply more resources to communications presenting greater investor risk while reducing routine preapproval of lower-risk content.

Supervision Would Still Be Required

Moving to a risk-based framework would not eliminate firms’ responsibility for their communications.

FINRA’s existing content standards would remain in place. Communications would still need to be fair and balanced and could not contain false, exaggerated, unwarranted, promissory, or misleading claims.

Firms that do not review every retail communication before use would also need controls supporting their alternative approach. These would include employee education and training, documentation of that training, ongoing surveillance, and follow-up when concerns are identified.

Firms would be required to maintain evidence showing that their supervisory procedures were implemented and followed.

Social Media Lines Could Disappear

The proposal would eliminate the distinction between static social media content, which generally requires principal preapproval, and interactive content, which may receive more flexible supervision.

Instead, firms would assess social media communications based on factors such as the content, audience, distribution method, and preparer, including paid promoters or financial influencers.

AI Does Not Change Accountability

The proposed framework would also help firms address the speed and volume of AI-generated communications. FINRA emphasized that firms remain responsible for their communications regardless of whether a human or an AI tool created them.

Firms could use AI as part of their communication review process, but those systems would need to be vetted, tested, and monitored. Oversight should address concerns such as inaccurate outputs, data protection, and whether the technology continues to perform as expected.

The proposal would allow firms to determine when AI-generated content requires principal preapproval based on its risks rather than applying the same review process to every output.

What Firms Should Consider

Although the proposal could provide greater flexibility, it would place more responsibility on firms to define and support their review decisions.

Risk Categories

Firms would need clear criteria for distinguishing higher-risk communications from content that may be reviewed through surveillance or other controls.

Written Procedures

Supervisory procedures would need to explain when principal approval is required, what alternative reviews apply, and how exceptions or concerns are escalated.

Training and Documentation

Employees would need training on the firm’s communication standards, and firms would need records demonstrating that the procedures are being followed.

Technology Oversight

Any AI or automated tools used to create or review communications would require testing, monitoring, and defined human oversight.

FINRA is also proposing changes to certain filing requirements and communications referencing past recommendations. If adopted, the broader proposal would give firms more flexibility while requiring them to demonstrate that their risk-based review procedures are reasonable and effective.