FINRA Reconsiders the Prohibition on Performance Projections: A Measured Shift in Rule 2210

Lots going on right now. FINRA’s latest rule filing marks a quiet but meaningful shift in the regulatory architecture governing broker-dealer communications. On February 10, 2026, FINRA proposed amendments to Rule 2210, its principal rule governing communications with the public. At its core, the proposal reconsiders one of the rule’s most entrenched features: the longstanding prohibition on projections of performance.

Historically, Rule 2210 has drawn a firm line. Broker-dealers have been barred from presenting projected performance, targeted returns, or forward-looking statements that could suggest predictability in inherently uncertain markets. The rationale is familiar. Retail investors, in particular, may overestimate the reliability of projections or fail to appreciate the assumptions embedded within them. The rule has therefore functioned as a blunt, but effective, investor protection mechanism.

The proposed amendment departs from that rigidity. FINRA now seeks to permit projections and targeted returns across a range of contexts, including individual securities, portfolios, and broader investment strategies. The permission, however, is not unqualified. Any such projection must be grounded in a “sound basis” and accompanied by appropriate safeguards. While the rule text will ultimately define the contours of those safeguards, the direction is clear. The focus is shifting from categorical prohibition to disciplined use.

This is the culmination of a longer regulatory dialogue. As early as 2017, FINRA explored loosening the prohibition, albeit in a narrower form limited to asset allocation tools. Industry feedback at the time pressed for greater flexibility, particularly in communications with more sophisticated investors. Since then, market practice has continued to evolve. Investment advisers, operating under the SEC’s Marketing Rule, have been permitted to use certain types of projections subject to conditions. Broker-dealers, by contrast, have remained constrained by a more restrictive framework. The resulting divergence has been increasingly difficult to justify.

The present proposal attempts to close that gap. It acknowledges that modern investment communications often rely on forward-looking analysis, scenario modeling, and probabilistic outcomes. At the same time, it preserves the underlying concern that projections, if misused, can mislead. The regulatory solution is to allow the practice while elevating expectations around substantiation, methodology, and disclosure.

For broker-dealers, the implications are both practical and strategic. On one hand, the rule would expand the toolkit available for client engagement, allowing firms to present more sophisticated and tailored analyses. On the other, it introduces a heightened compliance burden. Firms will need to ensure that projections are not only mathematically defensible, but also presented in a manner that fairly conveys uncertainty, limitations, and risk. Supervisory systems will need to evolve accordingly.

From a broader perspective, the proposal reflects a continued movement toward principles-based regulation. Rather than dictating what cannot be said, the rule increasingly asks whether what is said is fair, balanced, and supported. That shift aligns broker-dealer regulation more closely with adjacent regimes, while still preserving FINRA’s emphasis on investor protection.

The proposal remains subject to public comment and SEC approval. But even at this stage, its significance is evident. FINRA is signaling that the future of communications regulation will not be defined by prohibitions alone, but by the quality and integrity of the information presented.