Research and correspondence distinction controls

Implement the research and correspondence distinction controls requirement by classifying every retail communication by type (research vs. correspondence vs. other retail communication), then applying the supervision, approval, and recordkeeping rules that match the audience and distribution method. Your goal is consistent, evidence-backed routing: research follows research governance; correspondence follows correspondence supervision; both are captured and reviewable.

Key takeaways:

• Define and operationalize a classification decision tree that front-line staff can follow without judgment calls.
• Enforce type-specific supervision: different review, approval, and surveillance paths for research vs. correspondence.
• Retain audit-ready evidence: classification, approvals, distribution lists, surveillance results, and records retention.

“Research” and “correspondence” can look identical in an inbox. Examiners focus on whether your firm treats them differently in practice, based on what they are and who receives them. If a message that functions like research is supervised like ordinary correspondence (or vice versa), you can end up with gaps in approval, content standards, conflicts management, and recordkeeping. The requirement here is simple to state and easy to fail operationally: apply differentiated supervision controls based on communication type and audience (FINRA Rule 2210).

To operationalize it quickly, you need three things: (1) clear internal definitions and a decision workflow that classifies communications at creation and again at distribution, (2) systems controls that route items into the correct review/approval queues and surveillance routines, and (3) evidence that proves the control ran, not just that a policy exists. This page lays out a practical control design you can implement across email, chat, CRM notes, pitch materials, newsletters, market commentary, and “one-to-one” messages that quietly become one-to-many.

Regulatory text

Regulatory excerpt (baseline): “Apply differentiated supervision controls based on communication type and audience.” (FINRA Rule 2210)

Operator interpretation: You must (a) distinguish research from correspondence and other retail communications using defined criteria, then (b) supervise, approve, and retain each category under the appropriate supervisory system. The control must work for both intended audience (who it was meant for) and actual audience (who received it), since forwarding and re-use can change risk and required oversight.

Related supervisory and books-and-records anchors: Your supervisory system and evidence retention expectations tie back to FINRA Rule 3110 (supervision) and FINRA Rule 4511 (books and records). You are not implementing this requirement in isolation; you are proving supervision and recordkeeping are aligned to the communication’s classification (FINRA Rule 3110; FINRA Rule 4511).

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Plain-English interpretation of the requirement

You need a repeatable way to answer two questions for any outbound message tied to investments:

1. What is this communication type? (Research vs. correspondence vs. other retail communication.)
2. Who is the audience and how broadly is it distributed? (One client, a small group, all retail clients, prospects, internal only.)

Then you apply different controls. A one-to-one email with “market views” might be correspondence if it is truly individualized and not distributed broadly. The same content pasted into a newsletter becomes something else operationally because the audience changed. Examiners expect your controls to catch that transition and route it to the right supervision path (FINRA Rule 2210).

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Who it applies to (entity and operational context)

Applies to: FINRA member broker-dealers and their associated persons who create, approve, send, or supervise communications with the public (FINRA Rule 2210; FINRA Rule 3110).

Operational contexts where this breaks most often:

• Financial advisors sending “quick takes,” market commentary, or product comparisons by email/chat.
• Research or strategy teams distributing reports beyond the intended institutional/internal audience.
• Marketing using “research-like” language in newsletters, social posts, or web content.
• Sales desks forwarding research excerpts with added commentary.
• Branch managers supervising correspondence without clear triggers for escalation to advertising/research review paths.

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What you actually need to do (step-by-step)

1) Build a classification decision tree you can enforce

Create a written decision tree that classifies at minimum:

• Research (firm-defined criteria; include how you identify research content and research distribution).
• Correspondence (typically one-to-one or limited one-to-few messages).
• Other retail communications (e.g., broadly distributed retail communications that are not research).

Make the decision tree operational:

• Add required fields in your content creation or submission workflow: communication type, audience, channel, product/security references, whether it includes recommendations/ratings/price targets, and whether it is redistributed content.
• Define “audience” using distribution behavior you can measure (distribution lists, send-to counts, CRM campaign tags). Avoid definitions that require guessing intent.

Control objective: the same message classified by two different supervisors should land in the same category most of the time.

2) Map each class to supervision controls (review, approval, escalation)

Document a matrix that states, for each class:

• Who can author it
• Who must approve it (pre-use vs. post-use)
• What content standards/checks apply
• What surveillance applies after send
• What triggers reclassification (forwarding, posting externally, adding a new audience segment)

Example supervision matrix (tailor to your firm):

• Research: route to research governance review and any required supervisory approvals; restrict distribution; monitor redistribution; store final approved versions and distribution lists (FINRA Rule 2210; FINRA Rule 3110; FINRA Rule 4511).
• Correspondence: risk-based post-review sampling plus targeted lexicon surveillance; branch-level supervision; retain in WORM-compliant archives consistent with your recordkeeping program (FINRA Rule 3110; FINRA Rule 4511).

3) Implement routing controls in systems (don’t rely on policy alone)

Minimum viable routing controls:

• Email/chat archiving + supervision platform that tags items by channel, sender role, and key terms.
• Pre-send gate for items marked as “research” or “broad distribution,” requiring submission to approval queue.
• Distribution controls: restrict who can send mass communications; require approved templates for mass sends.
• Re-use controls: if an advisor copies/pastes from a research report into correspondence, require an attestation or auto-tagging that the source is research and apply the right disclaimers/handling rules.

If you use Daydream to manage control evidence, treat it as your control record: store the decision tree, supervision matrix, workflow screenshots, sampling methodology, and monthly review results in one place so you can answer exam requests without rebuilding the story from tickets and inbox searches.

4) Define surveillance and testing aligned to the classification risk

Design your supervisory reviews to prove you applied differentiated controls:

• Correspondence testing: confirm sampling occurred, exceptions were documented, and escalations happened under your written supervisory procedures (FINRA Rule 3110).
• Research distribution testing: verify only approved recipients received research, redistribution was controlled, and final versions match what was distributed (FINRA Rule 2210; FINRA Rule 4511).
• Channel coverage testing: confirm capture and supervision extend to approved digital channels and any permitted business texting/chat tools under your program (FINRA Rule 4511; FINRA Rule 3110).

5) Train to the decision points, not the policy

Training content should mirror the decision tree:

• “If you send it to more than one retail client, stop and classify.”
• “If you include performance projections/targets/ratings-like statements, classify and escalate.”
• “If you forward a research excerpt with added commentary, treat it as research-handling plus correspondence supervision at minimum, then follow your matrix.”

Train supervisors separately on escalation triggers and documentation expectations (FINRA Rule 3110).

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Required evidence and artifacts to retain

Keep artifacts that prove classification and differentiated supervision operated:

Governance and design

• Written supervisory procedures section covering communication classification and supervision paths (FINRA Rule 3110).
• Classification decision tree + definitions and examples (FINRA Rule 2210).
• Supervision matrix mapping class → review/approval/surveillance/retention controls (FINRA Rule 2210; FINRA Rule 3110; FINRA Rule 4511).

Operational run evidence

• Samples of items with classification tags, approvals (where required), and timestamps.
• Distribution lists/audience logs for research and mass communications.
• Surveillance reports (lexicon hits, reviews completed, escalations, dispositions).
• Exceptions register and remediation notes.

Recordkeeping

• Archive configuration evidence and retention settings aligned to your recordkeeping program (FINRA Rule 4511).
• Audit logs showing supervisory reviews and approvals occurred (FINRA Rule 3110; FINRA Rule 4511).

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Common exam/audit questions and hangups

Expect questions that force you to prove “different controls” means real process differences:

• “Show your definitions of research vs. correspondence and how staff apply them.” (FINRA Rule 2210)
• “How do you prevent a one-to-one message from becoming a mass communication without the right approvals?” (FINRA Rule 2210; FINRA Rule 3110)
• “What systems enforce routing and approvals?” (FINRA Rule 3110)
• “Show evidence of review for these specific users/channels over a period.” (FINRA Rule 3110; FINRA Rule 4511)
• “How do you supervise modern channels (chat/text) and retain records?” (FINRA Rule 4511)

Hangups usually occur when the firm can describe controls verbally but cannot produce consistent artifacts tied to actual communications.

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Frequent implementation mistakes and how to avoid them

Mistake 1: Treating classification as a one-time labeling exercise

Fix: Reclassify at distribution. Add triggers when an item is forwarded, reused, posted, or sent to a group.

Mistake 2: Letting “correspondence” become a catch-all bucket

Fix: Put hard gates around “broad distribution” behavior (mass email permissions, CRM campaign tags) so correspondence can’t quietly scale.

Mistake 3: No proof of differentiated supervision

Fix: Keep side-by-side evidence: a research item shows research governance approvals and controlled distribution; correspondence shows post-review sampling and documented dispositions (FINRA Rule 3110; FINRA Rule 4511).

Mistake 4: Supervisory procedures don’t match the systems

Fix: Update WSPs to reflect the actual routing, queues, and surveillance logic you run today (FINRA Rule 3110). Keep screenshots/config exports as evidence.

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Enforcement context and risk implications

No public enforcement cases were provided in the source catalog for this requirement, so this page does not cite specific actions. Practically, misclassifying research-like communications as correspondence increases the risk of inadequate review, inconsistent disclosures, unmanaged conflicts, and weak recordkeeping. Those failure modes typically show up during exams as supervision and books-and-records deficiencies under the firm’s supervisory and retention obligations (FINRA Rule 3110; FINRA Rule 4511), with communications standards expectations under FINRA Rule 2210.

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Practical 30/60/90-day execution plan

Days 1–30: Define and map

• Draft the classification decision tree and internal definitions tied to channels and audience behavior (FINRA Rule 2210).
• Build the supervision matrix and escalation triggers; align to WSP owners (FINRA Rule 3110).
• Inventory channels (email, chat, CRM notes, social, newsletters) and identify where classification happens today vs. where it needs to happen.

Days 31–60: Implement routing + evidence capture

• Configure or update supervision tooling to tag, route, and queue items by classification and distribution behavior (FINRA Rule 3110).
• Implement mass-send controls and template requirements where appropriate.
• Stand up an evidence pack (policy/WSPs, matrix, system screenshots, sample approvals, surveillance outputs) in a central repository such as Daydream for exam-ready retrieval.

Days 61–90: Test, tune, and operationalize

• Run targeted testing: pick a set of advisors/desks and trace communications from draft → approval (if applicable) → distribution → retention (FINRA Rule 4511).
• Validate sampling and escalation workflows: confirm exceptions are documented and resolved (FINRA Rule 3110).
• Deliver role-based training using real examples from your environment and publish a short “classification quick guide” for front line and supervisors.

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Frequently Asked Questions

How do we draw the line between research and correspondence if advisors write “market commentary” emails?

Use your decision tree to focus on observable factors: content characteristics and audience/distribution behavior, then route accordingly (FINRA Rule 2210). If commentary is reused broadly or resembles research outputs, require escalation and apply the stricter supervision path.

Do we need pre-approval for all correspondence?

FINRA communications supervision generally expects risk-based supervision of correspondence under your supervisory system (FINRA Rule 3110). Operationally, most firms use post-review sampling plus targeted surveillance, with pre-approval gates for higher-risk triggers you define.

What evidence is most persuasive to an examiner?

Artifacts that tie to real communications: classification tags, approval timestamps where required, review logs, and retention proof from your archive (FINRA Rule 3110; FINRA Rule 4511). Written procedures help, but run evidence closes the gap.

What if a client forwards our correspondence to others and it becomes broadly distributed?

You cannot control client forwarding, but you can control your own distribution and content. Set policies and templates that assume potential redistribution for certain categories, and document how you monitor and respond when you learn content was republished.

How do we handle third-party research we share with clients?

Treat redistribution as a controlled activity: record what was shared, to whom, and when, and ensure your supervision matrix addresses third-party content sharing and required handling/disclosures under your program (FINRA Rule 2210; FINRA Rule 4511).

Can we manage this without new tools?

Yes, but you still need enforceable routing and retrievable evidence. If you rely on manual steps, compensate with tighter gates (who can send what to whom), documented reviews, and centralized evidence storage so you can prove the control operated (FINRA Rule 3110; FINRA Rule 4511).

Related compliance topics

• 2025 SEC Marketing Rule Examination Focus Areas
• Access and identity controls
• Access Control (AC)
• Access control and identity discipline
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