A registered representative has discovered an article in a major news magazine that makes statements ...

By Investopedia Staff AAA
Q:
A registered representative has discovered an article in a major news magazine that makes statements that are highly favorable about a mutual fund that his company offers. If he wants to use the article in making presentations to prospects, what are the implications?
A) He may only use the information if it has been approved by a principal of his firm.
B) There are no restrictions to using material which is in the public domain.
C) The use of such material with public customers is only permitted if approved by the SEC prior to use.
D) The information in the magazine article would have to be filed with the NASD within 30 days of first use.
A:
The correct answer is c.
The use of magazines, as well as reprints, falls under the NASD rules regarding communications with the public, and as such, are considered to be sales literature. Such material must be approved by a principal prior to use with public customers.

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