Here’s my question.
I can’t figure out if options would be pre-filed or post-filed with FINRA. I think they are pre-filed, but in the materials, all I can find is that futures are pre-filed and derivatives are post-filed. Technically, options are a derivative security, so that’s where my question lies.
I also don’t really understand the difference between options/futures/derivatives, but I know it’s not pertinent to the exam.
Thanks for your help!
Hi, are you referring to retail communications about options?
The rules around this are nuanced. Options are considered derivatives because they derive (get) their value from the underlying asset. Future are also derivatives. However, both have specific callouts in Rule 2220 and Rule 2210, which cover these communication requirements.
FINRA says:
Options retail communications used prior to the delivery of the Options Disclosure Document: 10 calendar days prior to first use; wait for FINRA staff approval
Registered derivative retail communications: Within 10 business days of first use or publication
It’s unlikely the exam will ask for this level of detail!