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Secure Futures Promotion Guidelines to Safeguard Investors

Learn about the rules and requirements for promoting security futures effectively and ethically. Ensure compliance with NFA regulations to protect customers and maintain transparency in promotional activities.

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Secure Futures Promotion Guidelines to Safeguard Investors

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  1. Security Futures Promotional Material

  2. Promotional Material • Standardized oral presentations • Publications in newspapers or magazines • Broadcasts over TV, radio, or other electronic medium

  3. Promotional Material • Standardized reports, letters, publications • Any other written material

  4. Security Futures Promotional Material • Promotional material that specifically mentions security futures • What it’s not: • Promotional material that only includes reference to security futures as one of the services offered by the Member

  5. Security Futures Promotional Material • These rules apply to: • FCMs and IBs who are not NASDR members • FCMs and IBs who advertise using security futures promotional material

  6. Case Study

  7. Requirements • For security futures promotional material: • That which reaches a mass audience • All other promotional material

  8. Mass Audience • Standard Promotional Material: • TV • Radio • Newspaper/Magazine advertisements • Mass mailings • Web sites or other similar electronic communications

  9. Mass Audience • Security futures promotional material can only include: • A general description of the SF being offered • Name of the Member • Contact information for obtaining SF disclosure statement

  10. Mass Audience • A “General Description” includes: • Contract specifications • Margin requirements • How the products will be traded • Screen-based vs. open outcry • Futures or Securities account

  11. Mass Audience • Filing requirements: • Promotional material that reaches a mass audience must be submitted for NFA review and approval 10 days prior to first use

  12. All Other Promotional Material • Security futures disclosure statement: • Must accompany or precede all other types of promotional material

  13. All Other Promotional Material • Must include: • Name of Member • Date material was first used • A statement that security futures are not suitable for all customers

  14. All Other Promotional Material • Must NOT include: • Any statement suggesting that SF positions may be liquidated at any time • Any cautionary statement, caveat or disclaimer that: • Is not legible • Attempts to disclaim responsibility for the content of the promotional material, or • Is misleading or otherwise inconsistent with the content of the material

  15. All Other Promotional Material • Statistical tables, charts or graphs: • Must include the source of the information

  16. All Other Promotional Material • Claims, comparisons, recommendations or statistics: • Must state that supporting documentation is available upon request

  17. Case Study

  18. All Other Promotional Material • Trade recommendations • Past • Future

  19. All Other Promotional Material • Current trade recommendations must: • Have a reasonable basis for recommendations • Disclose any material conflicts of interest in the underlying security • Provide contact information for obtaining a list of prior recommendations • Offer to support the recommendation

  20. All Other Promotional Material • Past trade recommendations: • The SF • The underlying security • A derivative thereof • The SF recommended

  21. All Other Promotional Material • Past trade recommendations: • Must set forth all recommendations regarding the same SF within the last year • The price at the time of the recommendation • The price or price range within which the recommendation was to be acted upon • The general market conditions during the period covered

  22. All Other Promotional Material • Soliciting for SF managed account programs: • The actual past performance of customer’s trading the program • If none, must state that the program is unproven and, if applicable, comply with hypothetical restrictions

  23. Testimonials • Testimonials must be representative of all reasonably comparable accounts • Promotional material must state that the testimonial is not indicative of future performance or success • Promotional material must state if the testimonial was paid for

  24. All Other Promotional Material • Supervisory requirements: • Promotional material must be reviewed and approved in writing by a security futures principal • All other aspects of NFA Compliance Rule 2-29 pertain to SF promotional material

  25. QUESTIONS?

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