On January 13, 2012, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 12-02 (Notice 12-02), which provides guidance to firms on applying National Association of Securities Dealers (NASD) communications rules to investment-related fee and expense disclosures that must be made to certain retirement plan participants under ERISA Section 404(a) (participant disclosure rules).

Prior to this guidance, on October 26, 2011, the SEC issued a No-Action letter in which it:

For more information on that letter, see Legal Update, Participant-Directed Plan Investment Disclosures Will Satisfy Rule 482 Under the Securities Act.

Notice 12-02 states that FINRA will treat the information in the investment-related disclosures made under DOL Reg. Section 2550.404a-5 that are required by and comply with the requirements in the participant disclosure rules as if it were a communication that satisfies the content and filing requirements of NASD Rules 2210 and 2211. (These rules relate to certain recordkeeping, filing and content standards that would otherwise apply to certain fee and expense disclosures issued under the participant disclosure rules). Under Notice 12-02:

The Notice cautions firms, however, that including the information required by the participant disclosure rules in a communication does not affect other content not required by the participant disclosure rules. If a firm includes content in an advertisement or item of sales literature that promotes a product or service of the firm and is in addition to what is required by the participant disclosure rules, the non-required content is subject to the requirements of NASD Rules 2210 and 2211.

For a detailed discussion of the participant disclosure rules, see Practice Note, Fee and Investment Disclosure Requirements for Participant-Directed Plans.