Question of the Week

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.


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.

Professionals FAQs
  1. Where can I look for a financial planner?

    References from trusted friends or family members can help you find a financial planner; however, keep in mind that your friends' financial situations and goals may differ from yours and, therefore, their planners won't necessarily be the best fit for you.The Certified Financial Planner (CFP) Board of Standards certifies financial planners and maintains an online list of certified financial planners on its CFP Board of Standards website.
  2. If I am looking to get an Investment Banking job. What education do employers prefer? MBA or CFA?

    If you are looking specifically for an investment banking position, an MBA may be marginally preferable over the CFA. The caveat here is that the MBA would most probably need to be from a Top-20 B-School.The Chartered Financial Analyst (CFA) is well worth considering if you (a) are aiming for an entry-level position in investment banking, and/or (b) cannot afford to shell out six figures for an MBA or have to settle for a lesser-known B-school.That's because in the investment banking field, most entry-level positions are at the analyst level.
  3. Can I still pass the CFA Level I if I do poorly in the ethics section?

    You may still pass the Chartered Financial Analysis (CFA) Level I even if you fare poorly in the ethics section, but don't count on it. The CFA Institute has long emphasized that ethics is a particular area of focus for it. The seriousness with which the CFA Institute views ethics is evident from the fact that for exam candidates with borderline total scores, performance on the ethics section can mean the difference between passing and failing the exam.
  4. Under the USA, registration as an IAR includes all of the following EXCEPT:

    Under the USA, registration as an IAR includes all of the following EXCEPT: A. Minimum net capitalB. Passing a qualification examC. Filing a consent to service of processD. Posting a surety bond The correct answer is "A", since only an IA would need to prove minimum net capital requirements.