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.