Q:
Which of the following would be considered “sales literature” under the NASD’s definition?
a) A notice in the Wall Street Journal that the ERT Mutual Fund Family has just launched a new Pacific Rim growth fund.
b) An email sent by a registered representative to one of his customers regarding a new research report on UTN stock.
c) An announcement in Business Week of a new high-yield bond fund for income-oriented investors.
d) A letter, sent by a registered representative to thirty of her customers, which includes a reprint of a magazine article regarding the NDI Growth Fund.
A:
The correct answer is d.
Advertising is material created by a broker-dealer for use with the public, where the firm cannot control who sees, reads, or hears the material. Sales literature, as the name implies is typically printed material distributed to a known audience. A single email to a single customer, as in choice “B,” is correspondence. Choices “A,” and “C,” would constitute advertising. When substantially identical material is sent to 25 or more persons, including reprints, that material is sales literature.

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