FINRA Rule 2210 Projections Approved: Placement Agents Still Wait

The SEC Approved Targeted Returns for Broker-Dealers. The Ban Still Applies Today.

FINRA Rule 2210 now has an approved exception allowing broker-dealers to use projected performance and targeted returns, but it is not yet in force. On October 15, 2026, the SEC issued Exchange Act Release No. 34-106675 (File No. SR-FINRA-2026-004), approving FINRA's rule change as modified by Partial Amendment No. 1. The order was published in the Federal Register on October 20, 2026 at 91 FR 66371.

In its October 21, 2026 weekly update, FINRA said it will announce the effective date in an upcoming Regulatory Notice. Until then, a placement agent selling a private fund still operates under the old prohibition, even where the fund's adviser may show the same target return under the SEC Marketing Rule.

That gap is where the risk sits until the effective date. A pitch book circulated by a broker-dealer before the effective date is measured against the existing rule, not the approved one.

Why Targeted Returns Tripped Up Placement Agents

As Doug Cornelius notes in Compliance Building's analysis, the prohibition "had always been a sticking point for private fund marketing." Many private equity funds use a target return as a measure of the risk the fund is taking, and that tripped up broker-dealers acting as placement agents.

Alston & Bird's advisory frames it as a structural mismatch since the Marketing Rule took effect: an adviser could present targeted returns to a sophisticated prospect, but a registered broker-dealer selling the same interests could not. The amendment adds a fourth exception, new Rule 2210(d)(1)(F)(iv), to the rule's prohibition on predicting or projecting performance.

Who feels it most

• Broker-dealers distributing private funds and alternatives. Their offering materials are the direct target.
• Sponsors that use placement agents. One deck may need two compliance reviews.
• Dual registrants. King & Spalding notes they have maintained divergent marketing standards across adviser and broker-dealer channels.

Two Rules, One Deck: The Distinction Sponsors Conflate

Approval does not merge the FINRA and SEC regimes. The new exception covers only projected performance and targeted returns. According to Alston & Bird, it does not extend to backtested, model, related or extracted performance, and compliance with the Marketing Rule (Rule 206(4)-1) does not automatically establish compliance with Rule 2210.

A deck built to the adviser's Marketing Rule standard is not automatically clean for the placement agent's use. Compliance Building puts it plainly: the exception "is also not aligned with the IA Marketing Rule. So there will be friction."

Alston & Bird also reports that the exception excludes most mass-market and general retail communications. The approved version is aimed at targeted audiences, not broad distribution.

What Broker-Dealers and Sponsors Should Build Before the Effective Date

Per Compliance Building's summary, firms relying on the exception will need three things. Each is an operational build, not a disclosure tweak.

The three conditions

1. Audience-focused written procedures. Policies reasonably designed to ensure the communication is relevant to the likely financial situation and investment objectives of its intended audience.
2. Assumption and risk disclosure. Enough information for the audience to understand the criteria and assumptions behind the projection or target, plus the risks and limitations of relying on it.
3. Source recordkeeping. Records that include information about the source of any projection or targeted return used in the communication.

Cornelius flags the second prong as the one that will cause compliance teams the most headaches. It is also the one that requires the sponsor's deal team to document assumptions the placement agent can actually explain.

What leadership should decide this quarter

• Assign an owner for the assumption file. Someone on the sponsor side must produce defensible criteria behind every target return.
• Map which materials use backtested or model figures. Those remain outside the exception.
• Keep current materials under the existing ban. Do not distribute projection-bearing decks through a broker-dealer before the effective date FINRA sets in its Regulatory Notice.