A customer just emailed me a very common question. Chances are, you've wondered about this one a few times yourself.
QUESTION:
Can you clear up the concept of correspondence and sales literature by pointing out the difference between the two?
RESPONSE:
The reason the regulators distinguish the two is that for correspondence the firm just needs a monitoring program. With sales literature (or advertising), the materials must be pre-approved.
So, letters/faxes/emails to existing clients = correspondence, regardless of the number of recipients. But, you can only send letters/faxes/emails to 24 PROSPECTS in a 30-day period and call the communication "correspondence." If it's sent to 25+ recipients (and it always would be), it becomes sales literature subject to pre-approval.
Sales literature is different from advertising in that sales literature is delivered to a targeted, controlled audience. It includes research reports, market letters, flyers, brochures, cold-calling scripts. Advertising is blasted out to the masses: tv, radio, newspaper, billboards, websites.
See the actual rule and definitions at:
http://finra.complinet.com/en/display/display_main.html?rbid=2403&element_id=3617
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