prudential retirement compliance marketing … guide is designed to assist you in creating effective...

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Prudential Retirement Compliance

MARKETING REVIEW GUIDE

Advertising Policies, Procedures, and Disclosures


OVERVIEW

Purpose of Manual

Welcome to the 2008 edition of the Prudential Retirement Compliance Marketing Review Guide.

This guide is designed to assist you in creating effective marketing sales and advertising material

that complies with the marketing review policies of Prudential Retirement and the requirements

set forth by federal and state industry regulators. We hope that you will find the manual to be a

helpful, easy-to-use reference tool.

Prudential Retirement Compliance policies, procedures, and responsibilities are detailed within.

Both submitters and their Supervisory Principals will find specific information relating to their

responsibilities.

In addition to reading and referencing this guide, we ask that you use the Prudential Retirement

Compliance and PIMS databases as resources. The Marketing Review staff is here to offer any

guidance you may need in creating materials to use in your marketing efforts and to answer your

questions regarding Marketing Review policies and procedures. Please feel free to contact us

with your comments or suggestions so that we may continue to provide you with the information

you need in the most efficient manner possible.

The Manual will be periodically updated as necessary to ensure it is current and responsive to

changing regulations and business conditions. All registered representatives, their Supervisory

Principals and other submitters of marketing sales and advertising materials, should read and

become familiar with the information contained in the Manual that applies to their product-

related activities.

Prudential Retirement—Its Client Market, Products, and Services

Prudential Retirement delivers retirement-plan solutions for public, private, and nonprofit

organizations. The market includes retirement-plan providers and their participants in 401(k),

403(b), 457 plans. Services offered include record-keeping, administrative-support, investment-

management, comprehensive employee investment education and communications, and trustee

services. With over 80 years of retirement experience, Prudential Retirement meets the needs of

over two million defined contribution participants and more than six hundred thousand defined

benefit participants and annuitants.

Products offered in the qualified and nonqualified retirement-plan markets include registered

mutual funds, insurance-wrapped, and stable-value products.


Mission—Marketing Review

The Prudential Retirement Compliance Marketing Review Unit’s mission is to review and

approve sales material, advertising, internal training (“Sales Materials”) regarding broker/dealer

and insurance company products and services as required by applicable laws, regulations, and

Company policy.


MARKETING REVIEW PROCESS and PROCEDURES

Material That Must Be Submitted for Compliance Marketing Review

Procedures

Responsibilities

Policy/Rule

The Marketing Review Unit is responsible for reviewing and approving marketing sales

material, advertisements, independently prepared reprints, and certain institutional sales

material.

All marketing sales material and advertising intended for distribution to more than one

retirement-plan prospect, client, participant, etc. must be submitted for review and approved by a

Compliance Marketing Review unit Supervisory Principal (the Compliance Analyst).

Material That Must Be Submitted for Compliance Marketing Review

Material Intended for Use with the Public

The majority of Prudential Retirement materials are directed toward plan sponsors and their

participants. Materials include any written or electronic communication, independently prepared

reprint, and institutional sales material that is generally distributed or made generally available to

customers or the public. Examples—circulars, research reports, market letters, performance

reports or summaries, form letters, telemarketing scripts, seminar texts, reprints (that are not

independently prepared reprints) or excerpts of any other advertisement, sales literature or

published articles, and press releases concerning Prudential Retirement’s products or services.

Should you question whether material should be submitted to compliance please contact the

marketing review team.

Institutional Sales Material

Institutional Sales Material consists of any communication that is distributed or made available

only to institutional investors—employee benefit plans that meet the requirements of Section

403(b) or Section 457 of the Internal Revenue Code and have at least 100 participants, but does

not include any participant of such a plan.

If the communication or any excerpt thereof will be seen by any person other than an

institutional investor, the material is no longer considered communication with institutional


investors. For Prudential Retirement, generally institutional investors are comprised of existing

and potential retirement-plan providers.

If there is reason to believe that such communication would be forwarded or made available to

plan participants or other beneficiaries of institutional accounts, it will be treated as sales

material. Similarly, an advertisement in a publication designed for broker/dealers or other

institutional investors may not be treated as institutional sales material if there is reason to

believe that the publication will be made available to any person other than an institutional

investor.

Advertisements

Any material, other than an independently prepared reprint and institutional sales material, that is

published or used in any electronic or other public media, including any Web site, newspaper,

magazine or other periodical, radio, television, telephone or tape recording, videotape display,

signs or billboards, motion pictures, or telephone directories (other than routine listings).

Training Material

Product-related material used for training and education (including presentations to be given by

outside speakers) that is designed to be used to induce the public to purchase, increase, modify,

reinstate, borrow on, surrender, replace or retain an insurance product, annuity contract, or

mutual fund.

Electronic Communications

Marketing sales material and advertising transmitted electronically through Company-approved

e-mail and web sites.

Software

Software packages typically contain, but are not limited to, representations and comparisons of

various scenarios, hypothetical projections and information concerning tax and/or legal matters.

As such, Company-approved software and its output are considered sales and marketing material

and are subject to prior review and approval by Marketing Review.

Public Appearances

Participation in a seminar, forum (including an interactive electronic forum), radio or television

interview, or other public appearance or public speaking activity.

Independently Prepared Reprints

Defined as any reprint or excerpt of any article issued by a publisher, provided that:


The publisher is not an affiliate of the broker/dealer using the reprint or any underwriter

or issuer of a security mentioned in the reprint or excerpt and that the broker/dealer is

promoting;

Neither the broker/dealer using the reprint or excerpt nor any underwriter or issuer of a

security mentioned in the reprint or excerpt has commissioned the reprinted or excerpted

article; and

The broker/dealer using the reprint or excerpt has not materially altered its contents

except as necessary to make the reprint or excerpt consistent with applicable regulatory

standards or to correct factual errors.

Independently prepared reprints also include any report concerning an investment company

provided:

the report is prepared by an entity that is independent of the investment company, its

affiliates, and the broker/dealer using the report (the "research firm");

the report's contents have not been materially altered except as necessary to make the

report consistent with applicable regulatory standards or to correct factual errors;

the research firm prepares and distributes reports based on similar research with respect

to a substantial number of investment companies;

the research firm updates and distributes reports based on its research of the investment

company with reasonable regularity in the normal course of the research firm's business;

neither the investment company, its affiliates nor the broker/dealer using the research

report has commissioned the research used by the research firm in preparing the report;

if a customized report was prepared at the request of the investment company, its affiliate

or a broker/dealer, then the report includes only information that the research firm has

already compiled and published in another report, and does not omit information in that

report necessary to make the customized report fair and balanced.

Article reprints and research reports that do not meet the definition of "independently prepared

reprint" constitute sales literature.

Procedures

Special Routing Prior to Marketing Review

In certain instances, sales and marketing material must be sent to other departments, (such as

Product, Tax, or Law), before submitting for Marketing Review. For example, tax sign-off is

required on any piece that contains (or should contain) tax information. Materials that introduce

a new product or services, discuss major product enhancements, or provide detailed information

about sophisticated sales or tax concepts and strategies may require sign-off from Product, Tax,

and/or Law prior to submitting to Marketing Review.

Compliance Marketing Review should follow all other required reviews.


Submission

Electronically submit Retirement Marketing Sales Materials or Advertising to the Compliance

Marketing Review Unit via the Marketing Materials Mall (MMM) icon. Open the mall, click

“submit,” select “Retirement Services,” which then opens to the Control top sheet. It is important

to accurately and thoroughly complete the top sheet.

Submitter/Creator Responsibility

Upon completion of the top sheet, select the button for Supervisory Principal (SP) review and

approval of the materials.

In the comment section of the top sheet:

Identify information sources.

Identify similar, already-approved materials—INST Control Number and edition.

Indicate any additional approvals given to the material (e.g. Law, Tax, Product, etc.). For

tax-related items, include in the comment section the tax reference number and the name

of the Tax Marketing Reviewer.

Non-electronic (hard copy) Submissions

If an electronic file of the material is not available, submit the material by:

Completing and submitting the top sheet (all fields should be complete except for the

attachment field)

Printing the top sheet, and

Faxing the top sheet and the material to the 800 number on the top sheet. When faxed to

the 800 number, the material is then converted into an electronic file and deposited in the

MMRS inbox queue.

Control Number and Edition Date.

The Marketing Material Review System (MMRS) will assign a “Control Number” to all

materials for tracking purposes. The entire code must appear on all approved pieces. Generally

the full code is placed on the first page, lower-left corner or on the last page or back cover.

Example: INST-20080101-A000000

First part reflects the prefix used by Compliance to identify materials reviewed

Second part reflects the date of approval in year/month/day format

Third part is a unique number assigned to each individual piece


Material Return to Submitter and Assigned Status

Marketing Review strives for an average turn-around time of five business days, electronically

returning materials via the MMRS. Please take this into consideration when planning the

distribution of materials. Review status can be found on the return top sheet. Status categories

are:

Approved. The material can be used as is. No changes can be made to the piece without

Marketing Review approval.

Approved With Changes. The material can be used after incorporating all of the

changes indicated by the marketing reviewer. No other changes can be made to the

piece without Marketing Review approval

Revise and Resubmit. The material may not be used until Marketing Review approves it.

All the changes indicated by the marketing reviewer are to be made and the material

resubmitted to Marketing Review for approval.

Material describing investment products and services may require filing with a

regulator such as the FINRA and/or state departments of insurance. The Compliance

Marketing Review unit will determine whether marketing material needs to be filed

with a regulator, and will require that all necessary revisions be made prior to filing and

use.

Not Subject to Marketing Review. Approval from the Marketing Review Unit is not

required prior to use. Example: material that is clerical and administrative in nature.

Rejected. The material MAY NOT be used.

Expiration Policy

Generally, material may be used for a period of 18 months from the date of approval. If the

material is to remain active beyond 18 months, the submitter must initiate an Expiration Review.

Materials discussing performance have a shorter expiration period—generally to quarter end—

unless the material is approved as a template.

Final Copies

Materials assigned the status, “Approved” or “Approved with Changes” must be returned within

30 days to the MMRS database via the Marketing Materials Mall. It is management’s

responsibility to ensure the final copy is submitted by the agreed upon date.

If, by 30 days, the material is still not ready for use, the submitter should give Marketing Review

the anticipated date the final copy will be available.

If the final is not received within a reasonable time after its due date, it may be disapproved. At

that point, subsequent submissions will be directed to the “final-copies violators inbox” thereby

blocking the submitter’s materials from further review. Delinquent submitters may be subject to

disciplinary action, including restrictions on the privilege of submitting material in the future,

probation, or termination.


Changes to materials

Generally, changes may not be made to materials once Compliance Marketing Review completes

a review. However, it is relevant to differentiate between nonmaterial, minor changes and

substantive changes.

Management review and discretion regarding all changes is required. Any substantive change

requires Compliance re-review.

"Substantive change" is not defined anywhere in the rules; a precise and exhaustive definition to

cover all possibilities does not exist. Following are examples that could be considered

"substantive" changes.

a change to the audience for the material (e.g., plan sponsors to plan participants)

a change in the method of distribution of the material (e.g., paper to web-based)

addition or deletion of the types of products being described (e.g., adding mutual funds)

significant change to the format of the presentation (e.g., moving page 1 substantive

information to page 2)

addition/deletion of significant information from the material (e.g., removal of fund's

objectives)

addition/deletion of charts, graphs or other visual presentations

addition/deletion or movement of footnoted information or other disclosures

addition or modification to promotional banners, titles, etc. involving Prudential's

products or services

addition, removal or modification of words or phrases used to describe investment

products or services

Non-substantive changes, which do not require Compliance Marketing review, may at times be

made to materials without Compliance Marketing Review. A non-substantive change is outside

the context of product discussion. Keep in mind that there are times when a single word, such as

insertion of the word “not,” may be considered a material change by greatly impacting the

investment product or service.

Examples of changes not requiring resubmission include:

Changing trivial words not related to the product (“However” is changed to “Therefore).

Change in the plan vesting schedule

An update to citations for data, etc.

Materials treated as templates


At times it is appropriate to develop a master template having variable fields that can be

populated in brackets. Templates have limited language that changes—the message is the same,

the specifics for each situation are different. Examples of templates include: A presentation to

different clients within the same 403(b) market, form letters, performance updates, fund-mapping

letters. Changes in brackets might be client name, date, specific performance data, or specific

client or participant information.

When developing templates, keep the following in mind:

Use brackets to designate those areas containing variable language.

Only bracketed areas may change; all other verbiage must remain as originally approved.

When completing the submission top sheet for a template, insert the word “Template” in

the “Comment” section.

A Supervisory Principal may need sign off on each subsequent iteration of template

material. If just a client name and/or date changes, SP sign off is not needed. However,

if new investment options populate the fields, the Supervisory Principal will need to sign

off to ensure that proper disclosure complies with changes.

SP-approved variations of the template do not need Compliance Marketing Review.

Code each variation of a template so that it may be clearly differentiated and controlled.

Maintain all variations of templates in a file.

Materials that do not constitute templates

While materials often serve as a foundation for the development of other materials, unless the

original is officially a template (with only bracketed areas changed), the subsequent material

must also receive Compliance Marketing Review.

It is not appropriate to create one massive, catch-all template. Littering material with

myriad, bracketed, what-if statements is not acceptable. It may instead be necessary to

develop several templates to cover all bases.

There is no such thing as “approved” verbiage (or canned language)—and corresponding

disclosure—that can be joined together to create marketing material without requiring

Compliance Marketing Review. Even though the marketing material may be comprised

of several different formerly approved paragraphs, etc. it becomes a wholly new piece

that requires Marketing Review in the new context.


Responsibilities

Supervising Principals

SP sign-off evidences that the material is suitable for the targeted audience, has been reviewed

by all other areas (legal, tax, etc.) as appropriate, and is compliant with securities and/or

insurance regulations.

Ensure the quality and accuracy of sales and marketing materials distributed from your

department

Understand and comply with the policies and procedures discussed in this guide

Communicate these policies and procedures to registered representatives and associates

Review materials against these policies and procedures prior to submission for

Compliance Marketing Review

Verify that all required changes, and no others, are made

Ensure that the INST code and edition date are on material

Ensure the return of final copies of approved marketing material within the appropriate

timeframe

Prior to expiration, approve resubmitted materials for Marketing Review, as appropriate

Ensure that pieces are used in an appropriate manner and are not misleading or confusing

to the audience

Ensure final copy sent to Marketing Review is the same as the actual copy used

Maintain proper files

Ensure the re-review of materials receiving substantive change (defined above).

Submitters

Review, understand, and comply with the policies and procedures discussed in this guide

prior to submitting for Compliance Marketing Review

Use material that is suitable for the intended audience—is not misleading or confusing

Assume responsibility for the quality and accuracy of materials you submit

Secure needed supplemental reviews prior submitting for Compliance Marketing Review

(legal, tax, client etc.)

Prepare the Control Top Sheet correctly, indicating manager approval required

Resubmit approved materials to your principal and Marketing Review prior to expiration

Incorporate Compliance Marketing Review’s required revisions

Include the full INST code on all material


Incorporate all Compliance Review comments on materials; make no other changes to

material

Forward final copies to Marketing Review within 30 days of review

Maintain proper files, and

Only distribute approved material.

Compliance Marketing Review

Ensure the material complies with the content standards listed in the Marketing Review

Guide.

Approve Marketing Sales Material and Advertising

Ensure timely filing of sales material with regulatory authorities


COMMON REQUIREMENTS for MARKETING SALES and

ADVERTISING MATERIALS

Standards Applicable to All Communications with the Public


Content Standards

Legal, Tax, Accounting Information and Disclosure

Broker/Dealers, Non-Broker Dealers and Individuals

Record Retention

Limitations on Use of FINRA Name

Internal Use Only, Plan Sponsor Use Only, & Financial Professional Use Only

Special Situations

Policy

Materials relating to registered products are reviewed in light of FINRA and SEC

regulations. Likewise nonregistered products (separate accounts, etc.) are also reviewed

following the spirit of the standards for regulated products.


Misleading Material

All communications with the public shall be based on principles of fair dealing and good

faith, must be fair and balanced, and must provide a sound basis for evaluating the facts

in regard to any particular security or type of security, industry, or service. Materials may

not omit material fact or qualification if the omission, in the light of the context of the

material presented, would cause the communications to be misleading

Marketing sales material and advertising may not make any false, exaggerated,

unwarranted or misleading statement or claim. No member may publish, circulate or

distribute any public communication that the member knows or has reason to know

contains any untrue statement of a material fact or is otherwise false or misleading.

Context and Audience

The audience must be considered when creating marketing material. Different levels of

explanation or detail may be necessary depending on the audience. Prudential

Retirement targeted audiences run the gamut from plan sponsor to participant, financial

professional to internal use only.

Writers must remember that it is not always possible to restrict the audience when

creating marketing material. Additional information or an entirely different presentation

may be required depending upon the medium used for a particular communication and


the possibility that the communication will reach a larger or different audience than the

one initially targeted.

Footnotes

Including information in a footnote is not a substitute for well-crafted, informative and

accurate marketing material. Information relevant to understanding the subject may not

be buried in footnotes. Information may be placed in a legend or footnote only in the

event that such placement would not inhibit an investor's understanding of the

communication.

Footnotes should appear in close proximity to the language clarified and should always

appear on the same page as the text referenced. In situations where footnotes are

appropriate, they must be printed in at least 8-point type.

For example, footnotes in especially small type in an advertisement might be deemed to

inhibit an investor's understanding of the advertisement. Similarly, an advertisement that

presents bold claims that are supposedly "balanced" only with footnote disclosure would

not comply with this content standard

Footnotes included in material distributed in Florida and Utah must be the same size as

the body of the advertisement.

Predictions or projections

Communications with the public may not predict or project performance, imply that past

performance will recur or make any exaggerated or unwarranted claim, opinion or

forecast. A hypothetical illustration of mathematical principles of how money might grow

is permitted, provided that it does not predict or project the performance of an investment

or investment strategy. In that instance, the compounding disclosure may be needed.

The compounding concept is hypothetical and for illustrative purposes only and is not

intended to represent performance of any specific investment, which may fluctuate. No

taxes are considered in the calculations; generally withdrawals are taxable at ordinary rates. It is possible to lose money by investing in securities.

If any testimonial in a communication with the public concerns a technical aspect of

investing, the person making the testimonial must have the knowledge and experience to

form a valid opinion. The following disclosure may be needed for testimonials.

This testimonial may not be representative of the experience of other participants and is

not indicative of future performance or success.

Content Standards

Comparisons

Material must not deceive or mislead the public. Any comparison in advertisements or

sales literature between investments or services must disclose all material differences,


including (as applicable) investment objectives, costs and expenses, liquidity, safety,

guarantees or insurance, fluctuation of principal or return, and tax features. Claims and

statements must have a factual basis.

The purpose of product comparisons must be clear, fair and balanced. Some examples

include investment objectives, sales and management fees, liquidity, safety, guarantees or

insurance, fluctuation of principal and/or return, tax features.

Comparisons must not attempt to be forward looking.

It is inappropriate to compare the rates of return of dissimilar products—comparisons

should be in terms of apples to apples; not apples to oranges. (Examples: stable value

should not be compared with money market, etc.; a nine-month historical rate may not be

compared to a crediting rate.) If the client requests an unusual comparison, do not

promise the comparison, but rather state that we would like to go back to the product

person to explore further.

Disparaging Remarks

An advertisement shall not disparage other retirement-plan providers, competitors’ products,

insurance producers, services or methods of marketing.

Print Advertisements

Proximity requirements are intended to help investors more readily find information

necessary to understand and evaluate the performance data shown, and to remind investors of

the limitations of performance data.

Performance disclosures must be in close proximity to the performance data and is

required to appear in the body of the advertisement and not in a footnote.

The required prospectus (for registered securities products) and performance disclosures

in a type size at least as large as and of a style different from, but at least as prominent as,

that used in the major portion of the advertisement.

Exception: When performance data is presented in a type size smaller than that of the

major portion of the advertisement, the performance disclosure may appear in a type size

no smaller than that of the performance data.

Electronic Medium

If an advertisement is delivered through an electronic medium, the type size and style

requirements may be satisfied by presenting the required performance and prospectus

disclosures in any manner reasonably calculated to draw investor attention to them.

Radio and Television

Must give the required narrative disclosures emphasis equal to that used in the major

portion of the advertisement.


The required performance and prospectus disclosures are not considered to be of equal

emphasis if they are in written form while the major portion of the advertisement is

spoken. If the required disclosures appear in writing on a television screen during a

spoken advertisement, they are more likely to be overlooked, and not seen as a significant

part of the advertisement, than if they are included in the spoken presentation of the

advertisement.

The performance disclosures should appear immediately before, immediately after, or

briefly separated from the performance information.

Legal, Tax, Accounting Information and Disclosure

Marketing material can provide general information about the impact of taxes on various

retirement scenarios or advanced planning concepts, but neither Prudential Retirement nor its

representatives render tax or legal advice.

Prudential Retirement does not offer financial planning or financial-planning advice.

Materials that might allude to such should clearly disclose that the person representing the

material is not a financial planner (if their name is part of the presentation) and does not offer

financial planning advice. Example:

[First name, last name] is not a financial planner and does not offer financial planning advice.

The appropriate legal or Tax Marketing reviewer must first review communications that deal

with tax or legal matters. After legal or tax-marketing review comments are incorporated,

material may then be submitted for Compliance Marketing Review. The following, or a

substantially similar, disclosure may be relevant:

Neither Prudential nor any of its representatives are tax or legal advisors and encourage you to consult your individual legal or tax advisor with any specific questions.

This disclosure alone may not be appropriate for all marketing material. Additional

disclosure may be needed depending on the complexity of your material.

Broker/Dealers, Non-Broker Dealers and Individuals

All advertisements and sales literature must:

Prominently disclose the name of the broker/dealer and may also include a fictional name

by which the member is commonly recognized or which is required by any state or

jurisdiction;

Reflect any relationship between the broker/dealer and any non-broker/dealer or

individual who is also named; and


If it includes other names, reflect which products or services are being offered by the

broker/dealer.

Record Retention

All advertisements, sales literature, and independently prepared reprints must be

maintained in a separate file for a period of three years from the date of last use.

The file must include the name of the registered principal who approved each

advertisement, item of sales literature and the date that approval was given.

Submitters must maintain information concerning the source of any statistical table chart,

graph or other illustration used by the member in communications with the public.

Limitations on Use of FINRA Name

Members may indicate FINRA membership in any communication with the public, provided

that the communication neither states nor implies that FINRA or any other regulatory

organization endorses, indemnifies, or guarantees the member's business practices, selling

methods, the class or type of securities offered, or any specific security.

“Internal Use Only” “Plan Sponsor Use Only” and “Financial Professional Only

Use” Material

The way material is presented to sales professionals and plan sponsors will determine how it

is subsequently presented to the public. Therefore internal-use materials that present product

benefits should:

Discuss risks and, whenever possible, indicate where more complete information may be

obtained (prospectus or enrolment kits, etc.).

Internal materials that can be reasonably expected to communicate to prospective

investors or are designed to be employed either in writing or orally in the sales process

require similar legal disclosures as those required for use with the public

Restricted materials should be clearly and prominently labeled as "Internal Use Only”,

“For Financial Professional Use Only.” or “Plan Sponsor Use Only.” Restricted

materials may not be used with the public. Failure to comply can result in disciplinary

action or termination. (Remember that “Plan Sponsor Use Only” material does not

include plan sponsors of plans with fewer than 100 participants. Plan sponsors having

fewer than 100 participants are treated the same as participants.)

Special Situations

You are strongly encouraged to submit materials before use. However, circumstances will

arise occasionally when it is impossible to have certain “Internal Use Only” material

approved prior to use because it is so time sensitive. In these situations, you must obtain the

approval from your Supervisory Principle prior to use. Keep in mind that this process should

be used on a very limited basis.


Please contact Marketing Review to determine if your situation can qualify for this type of

process handling. Please make sure such materials are clearly labeled "Internal Use Only”

and deliver these materials to Marketing Review as soon as possible after use. After

reviewing such “Internal Use Only” material on a post-facto basis, Marketing Review will

proceed in one of the following ways:

Approve the material as is

Approve the material, provided noted revisions are incorporated prior to the next use or

Require the material be revised and redistributed


REGULATORY FILING REQUIREMENTS

of ADVERTISING and SALES MATERIAL

Scope

Procedures

o Material requiring regulatory filing

o FINRA filing procedures

o Supervisory Procedures

Exhibit A FINRA Filing Requirements for Various Materials

Policy/Rule

File all advertising and sales literature involving investment and insurance products (“Sales

Material”) meeting the requirements of FINRA Conduct Rule 2210 and/or any applicable

state insurance regulations within the timeliness requirements of each regulator.

Currently, FINRA Conduct Rule 2210 requires submission to the FINRA Advertising

Department within ten (10) calendar days of first use. There are no similar filing timeliness

standards imposed by the two state insurance departments which require that group annuity Sales

Materials be filed (i.e., Oklahoma and Mississippi).

Failure to obtain Marketing Review approval of sales material prior to its use or

distribution will be addressed under the Company’s Discipline & Sanctions Policy.

In addition to the timeliness of filing, Prudential Retirement’s Policy has the following

requirements:

All Sales Materials must be approved, in writing, by a designated Registered Principal

prior to use and prior to filing with a regulator. For purposes of such approval,

Registered Principals on the Prudential Retirement Compliance Marketing Review Staff

are responsible for review and approval of Sales Materials.

All records related to the review and approval of Sales Material are required to be

retained as required by the FINRA; namely, they must be maintained in a separate file for

a period of three years from the date of last use. The file must include the name of the

registered principal who approved each advertisement, item of sales literature, and

independently prepared reprint and the date that approval was given.

Final copies of all materials are required to be submitted and retained prior to any

approval (and subsequent submission to a regulator).


Scope

This Policy applies to all Sales Material developed for use by any of Prudential Retirement’s

sub-business units, including:

Sales Materials developed at the request of clients, but used under a client’s name

Any Sales Material that is substantially developed and/or used by Prudential Retirement

associates, regardless of the source of its authorship.

Procedures

Upon submission of Sales Material to Compliance through the Marketing Material Review

System (MMRS), the Compliance Marketing Review Analyst will review the material. Among

the information supplied by the Submitter is the intended Date of First Use. The Date of First

Use is defined as the date that the material is approved for use. The Marketing Review Unit’s

Approval Date is defined as the date that the Marketing Reviewer determines that the material is

in good order and is in the final format for distribution, printing, etc.

While reviewing the material, the Marketing Review Analyst also makes a determination

regarding the need to file the Sales Material with a regulator. The Marketing Reviewer will

place a notification on the sales material that indicates that FINRA filing is required.

After reviewing the Sales Material, the Marketing Review Analyst requests any necessary

changes and/or information, and communicates this information to the Submitter via the status,

“Revise & Resubmit.” The Submitter is then required to make the requested changes and/or

provide the requested information prior to the material’s approval for use. The Submitter’s

Supervisory Principal will be required to review the changes requested and to verify that the

changes were made properly. When resubmitting incorporated changes to Marketing Review,

SP review and approval is once again required.

If a Final copy is not received within 30 days of the approval date, the Submitter will be blocked

from further review — not be allowed to submit additional materials for review. The Marketing

Review Analyst will change the status of the sales material to “Disapproved” and will follow up

with the Submitter and the applicable Supervisory Principal to obtain the Final copy.

On a monthly basis, the Marketing Review Analysts will follow up with the Submitters’

Supervisory Principals to obtain the outstanding Final copies, and to validate that use of

Disapproved materials has been discontinued. The results of these follow up procedures

will be documented in MMRS and any infractions will be brought to the attention of the

marketing review manager who will perform appropriate follow up with senior

management as deemed necessary. Failure to comply with the Final-copy requirements for

sales material is subject to the Company’s Discipline & Sanction Policy.


Material requiring regulatory filing has any of the following characteristics:

Discusses registered securities products or registered insurance products, has never been

filed previously, and is intended for use with non-ERISA 403(b) plan sponsors or their

participants; and any retirement plan (i.e., IRC 401(k), 457, etc.) with less than 100

participants.

Discusses registered securities products or registered insurance products, has never been

filed previously, and is intended for mass media usage; that is, an uncontrolled audience

such as television, radio, print media, publicly accessible websites, etc.

For any materials filed with a regulator, the Submitter must also validate the Date of First Use

when supplying the Final version of the document. The Marketing Review Analyst will send an

e-mail to the Submitter’s Supervisory Principal notifying them of the decision to file.

Supervisory management is responsible for monitoring compliance with the affected Policy

requirements.

If regulatory filing is required, the Compliance Marketing Review Analyst will determine from

the MMRS top sheet the intended date of first use and confirm that date with the Submitter. The

Analyst will then initiate FINRA and/or state insurance filing procedures:

For FINRA filing purposes, Sales Material meeting the above requirements will be

immediately filed (on same date as Approved status is assigned) with the FINRA as

required under FINRA Conduct Rule 2210 [See Exhibit A as a reference for Sales

Materials and their requirement to file.].

For state Department of Insurance filings, the material will be forwarded to the Contracts

area for filing. The Analyst will follow up with the Contracts area to 1) confirm that the

filing was submitted, and 2) whether any comments have been received from the

regulator.

FINRA filing procedures:

The Compliance Marketing Review Analyst will electronically file materials with the

FINRA by using the FINRA Advertising Regulation Electronic Filing System (a web-

based system).

The Marketing Analyst completes the FINRA’s electronic “New Communication” top

sheet with the required information (e.g., name of material, date of first use, etc.).

Once submitted, the FINRA’s Advertising Department conducts its review and issues to

the Marketing Review Analyst both an email notification and hard-copy letter of the

FINRA Analyst’s review comments.

The Marketing Review Analyst reviews the FINRA’s comments and records receipt of

the review in MMRS.

o If “Revisions are Necessary,” the Marketing Review Analyst forwards the FINRA

letter to the submitter. Upon subsequent printing, revisions must be incorporated.

o If comments are broad in scope, staff meetings and/or broad-based communications

are initiated since there may be impact to on-the-shelf, or future, Sales Material.


o If the FINRA Comment Letter requires that material be reprinted or substantially

corrected, the Marketing Review Analyst will follow-up with the Submitter to

initiate appropriate follow-up action, and will obtain written confirmation from the

Submitter’s Supervisory Principal that the sales material has been revised, the date

on which it was revised, and that the previous approved version of the sales material

has been discontinued from use.

o The Manager of the Marketing Review function will review all FINRA comment

letters and ensure that all changes are communicated to Submitters and are

incorporated into approved materials as required.

The MMRS Top sheet is completed with the FINRA information (date of review,

comments, etc.) and the FINRA Comment Letter is attached to the AMRP Binder for

record retention purposes.

All sales material, regardless of regulatory filing decision, is subject to the Company’s

eighteen (18) month expiration policy. Submitters and their Supervisory Principal’s (or

their delegates) are required to ensure compliance with this requirement.

Supervisory Procedures

Describes the process by which the Compliance Supervisor determines and documents that the

procedures described in the SOP have been followed. Also describes the steps to be taken when

the procedures have not been adequately followed or did not detect/prevent a prohibited practice

or policy violation. The following is required:

Ensuring that all Sales Material for Registered Investment Company products is approved

by a Designated Principal prior to use:

o Supervisory management is responsible for monitoring compliance with this

requirement.

o This requirement will be reviewed as part of the Marketing Review Examination

Protocol.

Ensuring that Sales Material requiring regulatory filing are filed timely:

o Marketing Review supervisory management is responsible for monitoring

compliance with this requirement. As regulatory filing determination is made, the

material’s reference number, approval date and filing date will be added to a

Regulatory Filing Spreadsheet, which is maintained on a shared drive.

o The MR Manager will review the Regulatory Filing Spreadsheet to verify that such

filings are made timely. Follow up with the Analyst will be performed for any

filing item aged to five (5) days or over.

o The MR Manager will also review a weekly FINRA Filing Report from the AMRP

system that identifies the material requiring filing, their approval and filing dates.

The manager will review regulatory filings at or over 10 days and perform

appropriate follow up.


o The MR Manager will also review a sample of the sales materials listed on the

“Securities Materials Not Filed Report” to verify that appropriate FINRA or state

filing decisions were made by the MR Analysts. Any materials requiring filing will

be promptly filed and brought to the attention of the applicable Analyst.

o The Manager of the Marketing Review function will conduct periodic validations of

the information in this report in conjunction with the Marketing Review

Examination Protocol.

Ensuring that required changes to Sales Material are made prior to use:

o Need affirmation of date of first use and prior receipt/review of Final copy

Ensuring that all Regulator’s comments are incorporated into Sales Material approved for

use:

o Review of FINRA Comment letters and MR verification that changes is made.

o Confirmation from Submitter and Principal that changes were incorporated prior to

use.

o The Marketing Review manager’s analysis and review of FINRA and/or state

insurance department comment letters.


Protocol.

Ensuring that final copies of Sales Material and all relevant supporting documentation are

received and retained as required:

o The Final Copy process utilized requires that all Final copies be received within 30

days of approval; else the material is discontinued.

o MR management review of Finals reports.

o Notification to Submitters’ Principals of outstanding Final copies.

Ensuring that all inactive Sales Material is reflected as such in the MMRS system:


Protocol.

Ensuring that all expired (i.e., >18 months after approval) and all stale-dated Sales

Material is no longer used:


Protocol.

o This requirement will be reviewed also as part of the OSJ Examination Process.


Exhibit A — FINRA Filing Requirements for Various Materials

Tax Market Audience for Material FINRA Filing

treatment

Reasoning

1. 401(k)/457/ERISA

403(b) plans with more

than 100 participants

Plan Sponsor/Employer Filing not

required

Rule 2211

requirements apply

(meets definition of

Institutional Investor)

2. 401(k)/457/ERISA

403(b) plans with more


Participant Filing not

required

Material reflects

investment in a

Retirement Plan Trust

3. 401(k)/457/ERISA

403(b) plans with less


Plan Sponsor/Employer Filing required Rule 2210

requirements apply

4. 401(k)/457/ERISA

403b plans with less


Participant Filing not

required

Material reflects

investment in a

Retirement Plan Trust

5. Non-ERISA 403(b)

Programs

Plan Sponsor and/or

Participants

Filing required Rule 2210

requirements apply (no

related performance

may be used)

6. Retail clients (i.e.,

Personal Retirement

Services)

Retail customers Filing required Rule 2210

requirements apply (no

related performance

may be used)

7. Broad

communication about

registered securities

products (e.g.,

commercial media).

All audiences Filing required Rule 2210

requirements apply

since the audience is

not controlled.


REGISTERED-PRODUCTS—RULES AND REGULATIONS

FINRA & SEC Advertising Rules For Registered Investment

Companies

Omitting Prospectus Rule—SEC Rule 482

Supplemental Sales Literature—SEC Rule 34b-1

Generic Communications—SEC Rule 135a

Communications with the Public—

FINRA Conduct Rules 2210 & 2211

Introduction

Prudential Retirement plans fall under two broad categories. 1) Participants of 403(b) and

nongovernmental 457 plans are offered mutual funds or other registered products, 2) The 401(k),

401(a), governmental 457 plans, and Taft-Hartley market may be offered either mutual funds or

unregistered separate accounts.

Guidelines

In general, FINRA member communications with the public must comply with FINRA Conduct

Rule 2210 and Interpretive Materials under 2210. Mutual fund and variable contract advertising

and sales literature are also subject to specific SEC rules as detailed below.

FINRA member communications distributed to institutional customers and all correspondence

must comply with Rule 2211, the content standards of Rule 2210(d) (1) and the applicable

interpretive materials under 2210.

In addition to Rules 2210, 2211, and Interpretive Materials, mutual-fund and variable-contract

materials must comply with the following SEC rules as applicable:

SEC 482 (“Omitting Prospectus Rule”)

SEC Rule 34b-1 (Supplemental Sales Literature)

SEC 135a (Generic Communication)

SEC Rule 482—Omitting Prospectus Rule


Rule 482 permits material used prior to prospectus delivery. The communication must offer the

full prospectus. Rule 482 communications carry prospectus liability. In addition, Rule 482

contains: specific standards for the presentation of mutual fund and variable annuity

performance data; required disclosures; as well as prominence, proximity, type size and style

requirements for certain information.

Rule 482 permits investment companies to include up-to-date information, such as current

economic conditions, that normally would not be included in a fund's prospectus. As a result,

investors should receive better, more understandable, and more timely information in fund

advertisements.

Not a Safe Harbor: Compliance with Rule 482 does not alter the fact that advertisements must

still comply with the antifraud provisions of the federal securities laws.

Advertisement of past performance without an adequate explanation of other facts may create

unrealistic investor expectations or even mislead potential investors. The portrayals of past

income, gain, or growth of assets may be misleading where the portrayals omit explanations,

qualifications, limitations, or other statements necessary or appropriate to make these portrayals

of past performance not misleading.

An advertisement that complies with Rule 482 may nonetheless confuse, or even mislead,

investors regarding the fund's current performance, particularly when the fund's performance has

declined significantly after the period reflected in an advertisement.

Additionally, a mutual fund advertisement may be materially misleading when it showcases a

fund's performance for a certain time period without providing sufficient information to permit

an investor to evaluate the significance of the performance data. For example, if a fund

selectively advertises performance that is unusually high and not representative of the fund's

historical performance, investors may be misled.

Selectively advertising performance as of a particular date may be problematic where

performance has declined after the chosen date, but before the advertisement is submitted for

publication.

An advertisement that hypes extraordinary performance, but contains only footnote disclosure of

unusual circumstances that have contributed to fund performance may not result in a fair and

balanced presentation.

Rule 482 requires advertisements to include a statement that advises an investor to consider the

fund's investment objectives, risks, charges, and expenses carefully before investing; explains

that the prospectus contains this and other information about the investment company; identifies

a source from which an investor may obtain a prospectus; and states that the prospectus should

be read carefully before investing.

Example of the prospectus language for a mutual fund:


Investors should carefully consider a fund’s investment objectives, risks, charges and expenses before investing. For more complete information about the investment options available through your plan, please call 1-800-XXX-XXXX for a free prospectus that contains this and other information about our funds. Read the prospectus carefully before investing.

A variable insurance product advertisement should direct investors to both the contract

prospectus and the underlying fund prospectuses.

Example of the prospectus language for a variable product:

Investors should carefully consider a fund’s investment objectives, risks, charges and expenses before investing. For more complete information about the investment options available through your plan, please call 1-800-XXX-XXXX for a free prospectus that contains this and other information about our funds. For variable insurance products, please consider carefully both the contract prospectus and underlying-fund prospectus before investing.

Advertisements Including Performance Data

Advertising and sales material may contain either:

Actual performance returns, or

A narrative description of a fund’s record (e.g. communication that discusses a fund’s

track record without citing returns or mutual fund rankings).

Rule 482 requires the following information in a performance advertisement:

(i) A statement that past performance does not guarantee future results;

(ii) The investment return and principal value of an investment will fluctuate so that an

investor's shares, when redeemed, may be worth more or less than their original cost;

(iii) A statement that current performance may be lower or higher than the performance data

quoted; and

(iv) A toll-free or collect telephone number or a website where an investor may obtain

performance data current to the most recent month-end, unless the advertisement includes

total return quotations current to the most recent month ended seven business days prior

to the date of use.

An advertisement for a money market fund may omit the disclosure about principal value

fluctuation.

Example of the performance disclosure for monthly performance:

The performance quoted represents past performance. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than original cost. Past


performance does not guarantee future results. Current performance may be lower or higher than the performance data quoted. For performance information current to the most recent month end, please call 1-800-xxx-xxxx or visit our website at www.pruxxx xxx.

If a sales load or any other nonrecurring fee is charged, the maximum amount of the load or fee

must be disclosed. If the sales load or fee is not reflected in non-standardized performance, a

statement that the performance data does not reflect the deduction of the sales load or fee, and

that, if reflected, the load or fee would reduce the performance quoted is required to be disclosed.

SEC Rule 482 Checklist

The below section will help you develop or evaluate materials containing performance

information. Compliance with SEC Rule 482. Ensure that the performance information

conforms to the following:

___As-of date—data must be as of the most-recent quarter end.

___Data should be calculated in terms of Average Annual Total Return (heading over

data).

___1—5—10 years/since inception

___All figures equally prominent

___Money Market? Disclosure and 7-day current yield (adjacent to total return & same

size font). Disclose the yield quotation more closely reflects the current

earnings of the Fund than does the total return quotation.

___Government Bond fund? = disclosure = Shares of this fund are not issued or

guaranteed by the U.S. Government.

___Small cap, International, Sector, or Emerging Market funds, high-yield (junk)? =

disclosure

___Prospectus offering legend

___Performance represents past performance…; investment return and principal

fluctuates…; past performance is not guaranteed…(“The performance results do not

reflect…” should be in bold.)—disclosure must be up front [before] performance.

Font size equal to font size of main part of material; font style distinctly different to

readily stand out.

___Expenses/fees subsidized waived? (No-action letter wording; class A, Z,…) — (…if

bought outside plan, returns might be lower…) Sales load? Maximum must be

disclosed. If not reflected in performance, must disclose that… (normally our funds

do not have load charges)

___Comparative indices? Define index on same page as index performance data is

shown. Also disclose… 1) index is unmanaged, and 2) an investment cannot be made

directly in an index


___Extraordinary performance (pushing 50%) disclosure? Or year-to-date performance

if substantially lower than one year ago.

___Adhere to rule 2210

___Broker-dealer disclosure

SEC Rule 135a—Generic Communications

A generic communication educates the investor about investment companies, their services or

other non-securities products (such as retirement plans). The rule permits a general discussion

of product attributes as long as presentation does NOT promote specific investment company

products or the investment company itself.

Guidelines

An advertisement that does not specifically refer by name to the securities of a particular

investment company, to the investment company itself, or to any other registered securities, will

be considered a generic advertisement provided such communication is limited to any one or

more of the following:

Explanatory information relating to securities of investment companies generally or

to the nature of investment companies, or to services offered in connection with the

ownership of such securities,

The mention or explanation of investment companies of different generic types or

having various investment objectives, such as “balanced funds,” “growth funds,”

“income funds,” “specialty funds,” “variable annuities,” “bond funds,” and “no-load

funds.”

Offers, descriptions and explanation of various products and services not constituting

a registered security provided that such offers, descriptions and explanations do not

relate directly to the desirability of owning or purchasing a security issued by a

registered investment company, and

Invitation to inquire for further information.

Generic communications must contain the name and address of a registered broker or dealer or

other person sponsoring the communication.

SEC Rule 135a contemplates three situations:

1. Where the sponsor of a generic ad does not solicit inquiries, no disclosure is necessary

as to any particular investment company or the sponsor's relationship as principal

underwriter or investment adviser,

2. Where inquiries are solicited but prospectuses are not sent or delivered in response to

inquiries, such disclosure of the sponsor’s relationship as principal underwriter or

investment adviser would also not be required. This situation could arise, for example, if


an application form is to be sent in response to any inquiry and a suitability determination

is to be made on the basis of the completed application before any prospectuses are to be

sent, and

3. Where a generic ad solicits inquiries and prospectuses are to be sent or delivered in

response to inquiries, the number and not the names of registered investment companies

for which prospectuses are to be sent, and, if applicable, the fact that the sponsor is the

underwriter or investment adviser of such investment company or companies must be

stated. An acceptable type of statement would be, for example: “If you would like to

know more about three mutual funds advised and distributed by X & Co., write to

___________:”

If the advertisement does no more than identify the security and states the name of the

broker/dealer who will execute the orders, the appropriate disclosure is:

For more information contact your financial professional.

Must Offer the Security, Service or Product Advertised

With respect to any communication describing any type of security, service or product, the

person sponsoring the communication must offer the security, service or product described in the

communication.

FINRA Conduct Rule 2210—Communications with the Public

Guidelines

Sales literature is materially misleading if it:

Contains an untrue statement of a material fact, or

Omits to state a material fact necessary in order to make a statement, in the light of

the circumstances of its use, not misleading.

When is a Statement Misleading

Whether sales material is misleading depends on evaluation of the context in which it is made. In

considering whether a particular statement involving a material fact is—or might be—

misleading, weight should be given to all pertinent factors, including:

Other statements being made in the material,

The absence of explanations, qualifications, limitations or other statements necessary

or appropriate to make such statement not misleading, and

General economic or financial conditions or circumstances.


Representations about past or future investment performance could be misleading because of

statements or omissions made involving a material fact, including situations where:

Portrayals of past income, gain, or growth of assets convey an impression of the net

investment results achieved by an actual or hypothetical investment which would not

be justified under the circumstances, including portrayals that omit explanations,

qualifications, limitations, or other statements necessary or appropriate to make the

portrayals not misleading,

Representations about future investment performance, including representations, as to

security of capital, possible future gains or income, or expenses associated with an

investment,

Implying that future gain or income may be inferred from or predicted based on past

investment performance, and

Implying that gains or income realized in the past would be repeated in the future.

A statement involving a material fact about the characteristics or attributes of an investment

company could be misleading because of:

Statements about possible benefits do not give equal prominence to discussion of any

risks or limitations,

Exaggerated or unsubstantiated claims about management skill or techniques,

characteristics of the investment company, or an investment in securities issued by

such company, services, security of investment or funds, effects of government

supervision, or other attributes, and

Unwarranted or incompletely comparisons to other investment vehicles or to indexes.

Sales Literature Defined

Sales literature includes any communication (whether in writing, by radio, by television or any

other medium) used by any person to offer, sell or induce the sale of securities of any investment

company.

Communications between issuers, underwriters and dealers are included in this definition of

sales literature if such communications, or the information contained therein, can be reasonably

expected to be communicated to prospective investors in the offer or sale of securities or are

designed to be employed in either written or oral form in the sale of securities.


Money Market Funds

An advertisement for an investment company that holds itself out to be a money market fund

must include the following statement:

An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.

A money market fund that does not hold itself out as maintaining a stable net asset value may

omit the second sentence of this statement.

Presentation of Explanatory Information

Print Advertisements

The rule requires print advertisements to present the required prospectus and performance

disclosures in a type size at least as large as and of a style different from, but at least as

prominent as, that used in the major portion of the advertisement. The performance disclosures

must be in close proximity to the performance data and is required to appear in the body of the

advertisement and not in a footnote.

These proximity requirements are intended to help investors more readily find information

necessary to understand and evaluate the performance data shown, and to remind investors of the

limitations of performance data.

An exception is provided when performance data is presented in a type size smaller than that of

the major portion of the advertisement. In this case the performance disclosure may appear in a

type size no smaller than that of the performance data.

Electronic Medium.

If an advertisement is delivered through an electronic medium, the type size and style

requirements may be satisfied by presenting the required performance and prospectus disclosures

in any manner reasonably calculated to draw investor attention to them.

Radio and Television

The rule requires that radio and television advertisements give the required narrative disclosures

emphasis equal to that used in the major portion of the advertisement. The required performance

and prospectus disclosures are not considered to be of equal emphasis if they are in written form

while the major portion of the advertisement is spoken.

If the required disclosures appear in writing on a television screen during a spoken

advertisement, they are more likely to be overlooked, and not seen as a significant part of the


advertisement, than if they are included in the spoken presentation of the advertisement. The

performance disclosures should appear immediately after, immediately before, or briefly

separated from the performance information.

Performance Information of Multiple Funds

Print advertisements. In the case of an advertisement that consists of a list of performance data

longer than one page in length, the required performance-related disclosures may appear once, at

the beginning of the list, such as on the cover page or first page.

Website advertisements. The required performance disclosures must appear on the same web

page as the performance data to which the disclosures relate and in close proximity to that data.

Timeliness of Performance Data

All performance data contained in any advertisement must be as of the most recent practicable

date considering the type of investment company and the media through which the data will be

conveyed. Advertisement containing total return quotations will be considered to have complied

provided:

1. Calendar quarter performance:

• Total return quotations is current to the most recent calendar quarter ended prior to

the submission of the advertisement for publication; and

• Total return quotations current to the most recent month ended seven business days

prior to the date of use is provided at the toll-free (or collect) telephone number or

website; or

2. Month End Performance:

• The total return quotations is current to the most recent month ended seven business

days prior to the date of use of the advertisement.

The date of use refers to the date or dates when an advertisement is used by investors, not the

date on which an advertisement is published or submitted for publication. The date of use refers

to the entire period of use by investors and not simply the first date on which an advertisement is

used.

Performance Data for Non-Money Market Funds

Any quotation of the company's performance contained in an advertisement shall be limited to

quotations of the following performance formulas:

1. Average Annual Total Return (SEC-standardized return)


Any discussion of performance must at a minimum include the average annual total

returns for:

• 1 year,

• 5 years,

• 10 years, or

• Since inception—substituted for funds in existence for less than one, five or ten

years.

For funds in existence for less than 1 year the average annual total return should not be used

alone because the method of annualization could result in the number being misleading.

SEC-standardized average annual total returns must:

Be based on the methods of computation prescribed in investment company’s

registration statement,

Be current to the most recent calendar quarter ended prior to the submission of the

advertisement for publication,

Include the effects of sales charges,

Identify the length of and the last day of the one, five, and ten year periods, and

Be set out with equal prominence.

2. Current Yield (30-day SEC yield)

A current yield is:

based on the methods of computation prescribed in the investment company’s

registration statement,

accompanied by quotations of average annual total return,

set out in no greater prominence than the required quotations of average annual total

return, and

Adjacent to the quotation and with no less prominence than the quotation, identifies

the length of and the date of the last day in the base period used in computing the

quotation.

3. Tax-equivalent yield.

A tax-equivalent yield that:

Is based on the methods of computation prescribed in the investment company’s

registered statement,

Is accompanied by quotations of the current yield,


Is set out in no greater prominence than the required quotations of current yield and

average annual total return,

Relates to the same base period as the required quotation of current yield, and

Is adjacent to the quotation and with no less prominence than the quotation, identifies

the length of and the date of the last day in the base period used in computing the

quotation.

4. After-tax return

For an open-end management investment company, average annual total return (after taxes on

distributions) and average annual total return (after taxes on distributions and redemption) for

one, five, and ten year periods, except that if the company's registration statement has been in

effect for less than one, five, or ten years, the time period during which the registration statement

was in effect is substituted for the period(s) otherwise prescribed.

The after tax return quotations must:

be based on the methods of computation prescribed in the investment company’s

registered statement,

be current to the most recent calendar quarter ended prior to the submission of the

advertisement for publication,

be accompanied by quotations of the average annual total return,

include both average annual total return (after taxes on distributions) and average

annual total return (after taxes on distributions and redemption), and

be set out with equal prominence and be set out in no greater prominence than the

required quotations of average annual total return, and

be adjacent to the quotations and with no less prominence than the quotations,

identify the length of and the last day of the one, five, and ten year periods.

An advertisement for an open-end management investment company that represents or implies

that the company is managed to limit or control the effect of taxes on company performance

must accompany any quotation of the company's performance of average annual total returns

with quotations of both average annual total return (after taxes on distributions) and average

annual total return (after taxes on distributions and redemption.) The only exception is for a fund

that is permitted to use a name suggesting that the company's distributions are exempt from

federal income tax or from both federal and state income tax.

5. Other performance measures

Any other historical measure of company performance (not subject to any prescribed method of

computation) is permitted if such measurement:


Reflects all elements of return,

Is accompanied by quotations of average annual total return,

In the case of any measure of performance adjusted to reflect the effect of taxes, is

accompanied by quotations of average annual total return,

Is set out in no greater prominence than the required quotations of average annual

total return, and

Adjacent to the measurement and with no less prominence than the measurement,

identifies the length of and the last day of the period for which performance is

measured.

Performance Data for Money Market Funds

Any quotation of a money market fund’s performance contained in an advertisement shall be

limited to quotations of the following performance formulas:

1. Seven-Day Yield.

Any quotation of the money market fund's yield in an advertisement shall be based on the

methods of computation prescribed in the money market fund’s registration statement and may

include:

A quotation of current yield that, adjacent to the quotation and with no less

prominence than the quotation, identifies the length of and the date of the last day in

the base period used in computing that quotation,

A quotation of effective yield if it appears in the same advertisement as a quotation of

current yield and each quotation relates to an identical base period and is presented

with equal prominence, or

A quotation or quotations of tax-equivalent yield or tax-equivalent effective yield if it

appears in the same advertisement as a quotation of current yield and each quotation

relates to the same base period as the quotation of current yield, is presented with

equal prominence, and states the income tax rate used in the calculation.

2. Average Annual Total Return

Average Annual Total Return can accompany any quotation of the money market fund's average

annual total return as long as:

It is accompanied with a quotation of the money market fund's 7-day yield,

The quotations of average annual total return and 7 day yield are next to each other,

in the same size print, and

If there is a material difference between the quoted average annual total return and the

quoted 7-day yield, a statement that the yield quotation more closely reflects the


current earnings of the money market fund than the average annual total return

quotation must be included.

Performance for Funds in Existence Less Than One Year

It may be misleading for a fund that has been in existence for less than one year to advertise its

average annualized total return. The SEC has allowed these funds to advertise aggregate annual

returns in additions to, or in lieu of, the average annual total return.

Distribution Rates

Distribution rates are not permitted for Non-Money Market Fund Yields. Unless the sales

material is preceded or accompanied by a prospectus (SEC Rule 34b-1)

Blended Performance

The FINRA prohibits the use of blended performance except in limited circumstances. Blended

performance is permissible for asset allocation illustrations that include the performance of each

fund used in calculating the blended performance, or with institutional clients that invest in a

portfolio of funds.

Such illustrations must be preceded or accompanied by prospectuses for each fund in the

investor's portfolio.

Distribution Rates

Funds may quote a distribution rate in sales literature as long as the yield, total return

information, and a prospectus accompany the rate. The SEC believes that prospectuses and sales

literature provide an opportunity for a full discussion of distribution rates, including their

shortcomings.

A distribution rate, although promoted as an indicator of fund performance, is actually only an

aggregation of certain components of performance. A distribution rate does not reflect unrealized

losses and therefore its use in an advertisement can be misleading unless full disclosure is made

regarding losses.

Performance Information Must be Current

Any performance data included in sales literature under this rule must meet the currentness

requirements under Section 6030 of the rules. In the case of sales literature, the currentness

provisions apply from the date of distribution and not the date of submission for publication.

Quarterly, Semi-Annual, or Annual Report

The currentness requirements do not apply to quarterly, semi-annual, or annual report to

shareholders if the performance data is for the period beginning no earlier than the first day of


the period covered by the report. Additionally, the currentness requirements do not apply to any

such periodic report containing any other performance data.

SEC Rule 34b-1— Supplemental Sales Literature

The fact that the sales literature includes the information specified in this rule does not relieve

the investment company, underwriter, or dealer of any obligations under the antifraud provisions

of the federal securities laws. See Section 6020 of this Guide for factors to consider in

determining whether statements in investment company sales literature are misleading.

SEC Rule 34b-1 applies to investment company sales material that is preceded or accompanied

by a prospectus.

For control purposes, it is recommended that material intended to be preceded or accompanies by

a prospectus include a statement indicating that the material must be preceded or accompanied

by a prospectus.

SEC and FINRA rules prohibit the use of sales literature that is materially misleading. Sales

literature will be considered materially misleading if it: (1) contains an untrue statement of a

material fact; or (2) omits to state a material fact.

A statement discussing the advantages of investing in an investment company could be

misleading if it does not discuss any risks or limitations associated therewith.

Portfolio Disclosures

Below are some examples of disclosure that may be used when discussing specific types of

mutual funds and variable annuity portfolios. Additional disclosures may be required depending

on each fund’s specific objective.

Government Bond Funds

Shares of this fund are not issued or guaranteed by the U.S. Government.

High Yield Fund

High yield bonds, commonly known as junk bonds, are subject to a high level of credit and market risks.

Global or International Funds

Investing in foreign securities presents certain unique risks not associated with domestic investments, such as currency fluctuation and political and economic changes.

Geographic Concentration


The fund may focus its investments in certain geographical regions, thereby increasing its vulnerability to developments in that region.

Sector Fund

The fund may focus its investments in certain economic sectors, thereby increasing its vulnerability to any single economic, political or regulatory development.

Real Estate Funds

Investing in real estate poses certain risks related to overall and specific economic conditions, as well as risks related to an individual property, credit risk and interest rate fluctuations.

Small-cap Funds

Small-cap stocks have limited marketability and may be subject to more abrupt or erratic market movements than large-cap stocks.

Non-Diversified Funds

This fund is non-diversified, which allows the fund to invest more than 5% of the fund’s assets in the securities of any one issuer and involves greater risk than investing in a diversified fund because the loss resulting from the decline in the value of one security may represent a greater portion of the total assets of a non-diversified fund.

Top Holdings

When discussing top holdings in a specific fund, disclose the percentage of the total portfolio that these top holdings comprise and indicate that the holdings are subject to change.

Fund Participation in IPOs

The fund may participate in initial public offerings ("IPO") which may increase the fund's performance. As the fund's assets grow, the impact of these IPO investments on returns will decline.

A Hot Sector (e.g. technology, emerging growth, and health science funds)

The fund’s performance was achieved by investing in one or more of these stocks during a period of unprecedented returns in that sector of the market. There can be no assurance that this performance can be repeated in the future.

Tax Managed funds

Risks of investing in tax-managed funds include the limited ability to generate tax losses in rising markets, unavoidable increases in dividend yield in falling markets, changes in tax laws which may limit the effectiveness of some strategies, and excessive shareholder redemptions resulting in capital gains.


Dollar-Cost Averaging & Periodic Or Systematic Investment Plans

Sales and marketing material may not discuss or portray any type of periodic investment

plan or technique, such as dollar cost averaging, without disclosing the following:

Dollar-cost averaging and other periodic investment plans do not assure a profit and do not protect against loss in declining markets. Such a plan involves continuous investment in securities regardless of fluctuating price levels of such securities and investors should consider their financial ability to continue their purchases through periods of low price levels.

If the material deals specifically with the principles of dollar cost averaging, it must, in addition

to the above statement, include the following:

Since such a strategy involves continued investment, the investor should consider his or her ability to continue purchases through periods of low price levels.


RANKING GUIDELINES and INVESTMENT COMPANY

RESEARCH

Ranking/Disclosure Guidelines

A ranking entity refers to any independent entity that provides general information about

investment companies to the public. Only rankings supplied by an independent ranking entity or

created by an investment company or an investment company affiliate based on the performance

measurements of a Ranking Entity can be used. The ranking guidelines apply only to

advertisements and sales literature.

Advertising and sales material that contains a ranking MUST disclose the following:

1. Name (or publisher) of the ranking entity;

2. Name of the category (disclosure must appear in close proximity to any headline or

prominent statement that refers to a ranking);

3. Number of funds in each category (disclosure must appear in close proximity to any

headline or prominent statement that refers to a ranking);

4. Fund’s actual ranking within the category (i.e., 3 of 200) (disclosure must appear in close

proximity to any headline or prominent statement that refers to a ranking);

5. Time period with ending date on which the ranking is based (i.e., for the 5-year period

ending 3/31/06) (disclosure must appear in close proximity to any headline or prominent

statement that refers to a ranking);

6. Criteria on which the ranking is based;

7. For investment companies that assess front-end sales loads, sales charges were taken into

account;

8. If ranking is based on total return or the average SEC standardized yield, fees have been

waived or expenses advanced during the period on which the ranking is based, and the

waiver or advancement had a material effect on the total return or the yield for that period,

a statement explaining the effect;

9. A statement explaining that past performance is not indicative of future results; and

10. If the rating consists of a symbol rather than a number, the meaning of the symbol (e.g., a

four star ranking indicates that the fund is in the top 30% of all investment companies in

that category).


Time Periods Required in Mutual Fund Rankings (for non-money market mutual

funds)

When including mutual fund rankings in sales material, remember that:

A ranking based on yield can be based only on the current 30 day SEC standardized

calculation,

A ranking based on yield must be accompanied by SEC standardized average annual

total return rankings (1, 5, 10 year or since inception),

At a minimum, rankings must be current to the most recent calendar quarter,

If a mutual fund ranking is downgraded, the ranking must be updated to reflect new

ranking,

Rankings for less that 1 year are prohibited, and

Rankings for 1, 5, and 10 year time periods are not published by the ranking entity,

then rankings representing short, medium and long term performance must be

provided (for example, Morningstar).

Mutual Fund Rankings for Multiple Class/Two-Tier Funds

Investment company rankings for more than one class of investment company with the same

portfolio must be accompanied by prominent disclosure of the fact that the investment

companies or classes have a common portfolio.

Investment Company Family Rankings

The use of investment company family rankings is permitted. When a particular investment

company is being advertised with the family rankings, the individual rankings for that investment

company must be presented. Investment company family ranking must comply with all ranking

requirements stated above.

“Internal Use Only” Material

If “Internal Use Only” material does not adhere to the criteria contained herein pertaining to

Mutual Funds, clearly explain that the rankings are for informational purposes only and cannot

be used with the public.


USE of INDEX PERFORMANCE

Policy/Rule

Index performance may be included in communications with the public to help the investor to

understand the long-term performance of the market.

Comparing Index Performance

Comparing the performance of a mutual fund to an index, average, or other index is permissible

as long as the comparison is balanced. In order to provide a balanced comparison, the material

should be accompanied by a clear explanation of the relative differences between the product

types. Such differences may include liquidity, safety, guarantees, insurance, and fluctuation of

principal and/or returns and tax features. In addition, the purpose of the comparison must be

clear. This information must be in the main body of the material and not in a footnote or legend.

Disclosure of Basis and Source

The narrative accompanying the material must identify the index, averages or specific security

on which the performance is based and must disclose that past performance is no guarantee of

future results. The chart title must also reflect the historic nature of the performance and be

current. The source of the information must be identified.

Index Performance Alone

When a security has an existing performance record, material could be misleading that

overemphasizes index performance without a discussion of the security. The material must

provide a balanced discussion of the security’s features, benefits, and risks. Generally, a

security’s current performance should be disclosed when index performance is included. Index

performance may be used in material without the performance of the offered security provided:

There is disclosure that the index performance in not illustrative of the security

performance and there is an offer to provide the security’s performance,

The index performance is not presented in a way to imply that an investment can be

made in the index,

The sole use of index performance does not mask extremely poor performance by the

offered security, and

If the security is without a track record, this should be disclosed.


WRAP-FEE PRODUCTS ADVERTISING

Unregistered Separate Accounts—

Manager of Managers Group Annuity Products

Policy/Rule

Manager of Manager (MoM) products—arising out of a contract issued by an insurance

company, PRIAC,—are “exempt securities” under 3(A) (12) of the 1934 Act. While MoM

materials are not subject to FINRA standards, per se, Prudential Retirement strives to honor

the spirit of the regulations when reviewing sales materials.

Sales materials must clearly describe the types of products being offered and disclose the legal

entity making the offer. Therefore let the reader know upfront whether or not the products are

mutual funds. A mixed list should clearly differentiate between mutual funds and insurance

products.

Share class should not be used when stating the name of a MoM product.

If a separate account (Alliance fund) invests wholly in an underlying fund, once named, a

clarifying sentence could follow similar to the following wording:

This Separate Account invests wholly in Class X shares of the xxxxxx Fund, a mutual fund.

Wrap Fee Performance

Presentation of Wrap Fee performance statistics, other than in a one-on-one in person meeting,

must be shown net of all program fees. Gross performance numbers may be shown with net

performance numbers provided they are not shown more prominently than the net performance

numbers. Additionally, if mutual fund performance is presented, the performance numbers must

comply with relevant SEC Rule 482 and FINRA Rule 2210.

All performance presentations must disclose:

Past Performance is no guarantee of future results.


Disclosure Treatment for Sales Material

The following chart may be helpful when deciding which disclosures to include on (MoM or

registered product) materials.

Disclosure Treatment for Sales Material

Plan Type

Audience for Material

Product disclosures

Product disclosures

Product disclosures

Reasoning

Registered Funds MoM Funds

Both

1. 401k/457/ERISA 403b plans with more than 100 participants

Plan Sponsor or Employer

PIMS, Prospectus-offering, Service mark

MoM, Service mark


Rule 2211 requirements apply (meets definition of Institution)

2. 401k/457/ERISA 403b plans with more than 100 participants

Participant PIMS, Prospectus-offering, Service mark

MoM, Service mark

MoM, Service mark

Material reflects investment in a Retirement Plan Trust

3. 401k/457/ERISA 403b plans with less than 100 participants

Plan Sponsor or Employer


MoM, Service mark

MoM, Service mark

Rule 2210 requirements apply

4. 401k/457/ERISA 403b plans with less than 100 participants

Participant PIMS, Prospectus-offering, Service mark

MoM, Service mark

MoM, Service mark

Material reflects investment in a Retirement Plan Trust

5. Non-ERISA 403b Programs

Plan Sponsor and/or Participants


N/A N/A Rule 2210 requirements apply (no related performance may be used)

6. Retail clients (i.e., Personal Retirement Services)

Retail customers


N/A N/A Rule 2210 requirements apply (no related performance may be used)

7. Broad communication about registered securities products (e.g., commercial media).

All audiences PIMS, Prospectus-offering, Service mark

N/A N/A Rule 2210 requirements apply since the audience is not controlled.

PIMS: Securities products and services are offered by Prudential Investment Management Services LLC (PIMS), Three Gateway Center, 14

th Floor, Newark, NJ 07102-4077. PIMS is a Prudential Financial company.

Prospectus offering language: Investors should carefully consider a fund’s investment objectives, risks, charges

and expenses before investing. For more complete information about the investment options available

through your plan, please call 1-800-XXX-XXXX for a free prospectus that contains this and other information

about our funds. Read the prospectus carefully before investing.


MOM: Prudential Retirement’s Manager of Managers group annuity contracts are issued by Prudential Retirement Insurance and Annuity Company (PRIAC), Hartford, CT, a Prudential Financial company.

SERVICE MARK: Prudential Retirement, Prudential Financial, PRU, Prudential and the Rock logo are registered service marks of The Prudential Insurance Company of America, Newark, NJ and its affiliates. Prudential Retirement is a Prudential Financial

business.


Logo/Service Mark Standards for Prudential Financial and Prudential

Retirement

The Prudential Financial Logo

Prudential Retirement

Financial Information About Prudential Financial and Prudential Retirement

Policy/Rule

Corporate Identity has published guidelines for the use of the Prudential logo. Marketing

sales materials and advertising should reflect those standards.

The Prudential Logo

The Corporate logo standards cover many topics, including the font, size, color, and placement

of the logo. Please refer to “Logo Standards,” available on “Inside the Rock” for detailed

information. In general, whenever the logo is used on marketing materials used with the public

(other than on business cards or stationery), the following disclaimer should be added:

Prudential Retirement, Prudential Financial, PRU, Prudential and the Rock logo are registered service marks of The Prudential Insurance Company of America, Newark, NJ and its affiliates.

Prudential Retirement

When Prudential Retirement is first mentioned within materials, the registered mark (®)

should

follow. The corresponding disclosure should be included:

Prudential Retirement is a service mark of The Prudential Insurance Company of America, Newark NJ, and its affiliates.

Whenever Prudential Retirement is mentioned and the Prudential logo appears on materials,

disclosure is combined for efficiency: Additionally, the relationship of Prudential Retirement to

Prudential Financial must be noted.

Prudential Retirement, Prudential Financial, PRU, Prudential and the Rock logo are registered service marks of The Prudential Insurance Company of America, Newark, NJ and its affiliates. Prudential Retirement is a Prudential Financial business.


Prudential Retirement is a Prudential Financial business.

Financial Information About Prudential Financial and Prudential Retirement

You may only use financial information that appears on the Investor Relation’s Intranet site.


USE of TITLES and APPROVED DESIGNATIONS

Policy/Rule

Sales professionals and employees must clearly and appropriately identify themselves by their

Prudential title. Sales professionals and employees are only permitted to use the titles,

designations, and industry program acknowledgments relevant to the position held within the

business.

Titles to be Used with Registered Products

Whenever a Registered Representative references registered security products and services in

written and/or verbal communications (for example, in correspondence, sales material and/or

marketing materials), the title “Prudential Investment Management Services (PIMS) Registered

Representative” must be used in addition to the representative’s approved Prudential title.

Educational Degrees

Home Office

Some professional education degrees are prohibited because they may be misleading to the

public as to the sales professional's and field manager’s role. For example, home-office

employees are neither permitted to hold themselves out as attorneys and/or accountants nor use

such designations, unless in fact they are performing functions for the Company in the official

capacity of an attorney and/or accountant. However, such designations can be used in resumes

or biographies.

Field

Likewise, the use of the professional designations JD and CPA by sales professionals or field

management is prohibited because Prudential, its sales professionals, and its employees do not

give legal or tax advice. Although these degrees may not be used in conjunction with a sales

professional’s title, they may be included in the text of prestige pieces, resumes, or biographies.

Senior Designations and Credentials

FINRA is concerned about the proliferation of professional designations, particularly those that

suggest an expertise in retirement planning or financial services for seniors, such as “certified

senior adviser,” “senior specialist,” “retirement specialist” or “certified financial gerontologist.”

The criteria used by organizations that grant professional designations for investment

professionals vary greatly. Some designations require formal certification, with procedures that


include completion of a detailed and rigorous curriculum focused on financial issues,

culminating with one or more examinations, as well as mandatory continuing professional

education. On the other end of the spectrum, some designations can be obtained simply by

paying membership dues. Nonetheless, seniors may be led to believe that these individuals are

particularly qualified to assist them based on such designations. Keep in mind that neither

FINRA nor the SEC endorses any professional designation. Given this environment, the use of

senior designations is generally not allowed in Prudential Retirement sales material and

advertising.


Testimonials and Referrals

Policy/Rule

The individual who is providing the testimonial must give written authorization to use it in the

manner proposed. The sales professional must retain the authorization. Marketing Review

must approve the testimonial.

Guidelines

The following should be observed. Testimonials must be:

Genuine,

Representative of the author’s current opinion,

Applicable to the retirement-plan features or benefits advertised, and

Accurately reproduced with sufficient completeness to avoid misleading or deceiving

participants as to the nature or scope of the testimonial, appraisal, analysis or

endorsement.

The content of testimonials is reviewed in the same manner as other marketing-sales and

advertising materials. Testimonials must be truthful and not misleading in fact or implication;

they may not misrepresent the benefits, terms or conditions or the retirement product or services.

In using testimonials, we are adopting all the statements contained therein.

If the individual making a testimonial has a financial interest in the product or receives any

benefit other than the required union scale wages, that fact shall be prominently disclosed in the

advertisement.

Rule for Registered Securities Products and Services

Any testimonial concerning investment performance of a broker/dealer or its products must

prominently disclose:

The testimonial may not be representative of the experience of other clients,

The testimonial is no guarantee of future performance or success,

If more than a nominal sum is paid, the fact that it is a paid testimonial, and

If the testimonial concerns a technical aspect of investing, the person making the

testimonial must have the knowledge and experience to form a valid opinion.


A disclosure similar to the following may be needed:

The testimonial may not be representative of the experience of other participants and is not indicative of future performance or success.


Trademarks and Service Marks

Policy/Rule

A registered trademark symbol, ®, may only be used when a mark has been registered with the

United States Patent and Trademark Office.

The term “trademark” refers to a word, design or logo used to identify a tangible product, such as

a newsletter or computer software program.

The term “service mark” refers to a word, design or logo used to identify a service, such as an

financial planning service.

The guidelines apply to the use of both Company and third-party marks.

Proper Use of Trademarks and Service Marks Prudential Retirement’s products and services

include many registered and nonregistered service marks. Examples include, Prudential

Retirement®, GoalMaker

®, Prudential IncomeFlex

® (registered service marks).

Please refer to the “Editorial Standards—Prudential Retirement Creative Services” for a

complete listing and proper treatment of marks specific to Prudential Retirement. The below

discussion serves as a general guide:

The following guidelines should be followed when using trademarks and service marks.

Highlighting

The trademark or service mark should be distinguished from the surrounding text. This may be

accomplished by, for example, using a different typeface or type color, italicizing or capitalizing

a word, or using quotation marks.

Symbols (®, TM , SM

)

In addition to highlighting the mark, the appropriate symbol (described below) should be placed

to the right, and slightly above, the mark.

® denotes a trademark or service mark registered with the United States Patent and Trademark

Office. It can only be used when the mark is registered and in connection with goods and

services for which the mark has been registered.


Note: use of the ® symbol when a mark is not registered may limit the Company’s

right to enforce its trademark rights and may be considered fraud.

TM

denotes a mark for use in connection with goods, such as newsletters, manuals, and computer

software. It is not necessary that a mark be registered in order to use this symbol.

SM

denotes a mark for use in connection with services, such as those offered by Prudential

Retirement. The service mark protects a symbol or phrase that a company uses to identify itself

and differentiates the service from the competition. It may be used on documents that promote or

advertise the services (for example, brochures, newspaper advertising, direct mail pieces, etc.) or

used in connection with rendering the services (for example prospectuses or policies). It is not

necessary that a mark be registered in order to use this symbol.

Forms of Marks

Trademarks and service marks should not be used as verbs or adjectives, and should not be used

in plural or possessive forms, unless the mark has been registered in those forms.

Consistency

Trademarks and service marks should be used consistently and should not be varied by using

alternate spelling or hyphenation.

If the mark is registered, or if an application is pending, the mark should conform to the version

shown in the registration or application.

When a Trademark or Service Mark Symbol Must Be Used

The ®, TM

, SM

symbol must accompany the use of Company trademarks and/or service marks

(and, where applicable, third party marks) on all publicly-distributed materials regardless of

medium (for example, on brochures, videos, flyers and the Internet).

Trademarks and/or service mark symbols are not required on “Internal Use Only”. They must be

included on correspondence sent to an individual client.

Frequency of Symbol Use Within a Single Piece

It is not necessary to add symbols every time a mark is used in a particular piece. However, a

symbol should be used in the first instance and/or in the most prominent places a mark is

featured (for example, on the cover of a brochure or prospectus, in the headline of an

advertisement or in headings or subheadings in text pieces). The symbol should also be used the

first time that the mark is used in the text itself. If the mark appears in several sections over a

number of pages in a piece, it is advisable to repeat the particular symbol where it first appears in

the text in each section.


Alternative Ways to Identify a Trademark or Service Mark

If it is not possible to use the appropriate symbol or when the symbol would interfere with the

layout of an advertisement, a footnote may be used.

For Unregistered Marks

[identify mark] is a service mark of The Prudential Insurance Company of America.

For Registered Marks

[identify mark] is a registered service mark of The Prudential Insurance

Company of America.

Use of Third Party Trademarks or Service Marks

Third party trademarks or service marks are sometimes used in advertising or marketing

materials; for example, in cases where the Company purchases or licenses services from an

outside vendor and then advertises those services. Use of third party marks must comply with

the terms of the Company’s contractual agreement with that third party, contain the proper

trademark symbol and indicate the name of the trademark owner in a footnote. (For example:

_________ is a service mark [or registered service mark] of_________ [name of third party].)

Further Information

To determine if a mark has been cleared for use and/or registered with the United States Patent

and Trademark Office and for information concerning the use of third party trade-marks and

service marks, contact the Intellectual Property Unit of the Law Department.

Please refer to the Law Department’s trademark database to view a complete list of registered

marks and marks which are the subject of pending applications.


USE of CHARTS/GRAPHS and ILLUSTRATIONS

Policy/Rule

Information provided in charts, graphs, illustrations and other visual aids should be clearly

presented so that they may be readily understood.

Charts and Graphs

the axes and baselines must be clearly labeled

the starting point of a graph must fairly reflect the performance of the product.

increments on the axes must aid the reader in understanding the significance of the data.

must be sized to scale. Certain portions of a grid cannot be magnified or stretched to

emphasize the growth of an investment or contract fund.

all text must be at least 8-point font so that the reader can understand how the data relates

to the graph

text accompanying a graph must clearly state its purpose and significance.

information must be complete and include the basis for such information.

graphs illustrating the historic performance of a hypothetical investment in a product

must disclose the relevant assumptions such as the initial investment amount, rate of

growth, whether taxes, expenses or fees are reflected, etc.

charts or graphs that compare taxable to tax-deferred investing must disclose the after-tax

value of the tax-deferred investments at the end of the time period shown, as well as the

effect of any applicable penalties. This information must be included in the chart itself.

Graph and Chart Disclosures

If the graph or chart presents hypothetical information, the piece must state

For illustrative purposes only. This does not reflect the performance of

any specific investment.

If past, actual performance is presented, the piece must state

Past performance does not guarantee future results

The source of the material must be identified if not created by Prudential Financial.

Comparison


Charts, graphs, or illustrations should not compare unlike products without including any

material differences between the subjects of the comparison. Such differences may include

investment objectives, fees, liquidity safety, fluctuation of principal and/or returns and any other

factors necessary to make the comparison fair and not misleading.

Hypothetical Investment in a Benchmark Index

Graphs may compare an investment in a product with a hypothetical investment in a benchmark

index over the same time period as long as the comparative index is appropriate and provides the

reader with a sound basis for evaluating the facts with respect to the product. If the benchmark

index used in such a comparison is different than the one used in the registered product’s

prospectus, the index must be appropriate. Keep in mind that additional disclosure may be

required.


TRANSLATIONS

Policy/Rule

Sales and marketing materials about registered investment products may not be printed in a

foreign language unless the prospectus for that product is also printed in that foreign

language.

General Guidelines

Registered securities product sales materials:

o Sales and marketing materials concerning registered investment products, such as Retail

Mutual Funds, self-directed brokerage products or employer stock, may not be written in a foreign language unless the statutory Prospectus for the securities products discussed are also printed in the same foreign language. For example, mutual fund sales material written in Spanish requires that the corresponding mutual fund prospectus (es) also be appropriately translated and written in Spanish.

o Foreign language generic discussions of plan related information are permitted, such as

instructions on how to access investment information, the importance of contributing to a retirement plan, etc. However, if the material references registered securities products, including the broker-dealer offering those products, the material must be written in a language supported by a same-language prospectus.

Unregistered Separate and General Account product sales materials:

o The SEC Rule does not apply to products that do not offer a prospectus, such as the Manager of Managers separate accounts and stable value products, such as GIF, since these products are not registered with the SEC. For example, Fact Sheets for Manager of Managers separate accounts may be translated into a foreign language regardless of whether or not any regulatory filings (e.g., Plans of Operations) are available in the foreign language.

In-Plan IncomeFlex

o Any sales material for in-plan IncomeFlex that is translated into a foreign language can only be used with the Important Considerations translated in that same language. IncomeFlex material cannot be used in a language unless the Important Considerations is translated in that same language.

ERISA Considerations

o Another consideration is ERISA and the Plan Sponsor’s intended use of the Rule 404c safe harbor. Developers of sales material and staff who wish to use foreign language sales material should consult with Law Department and the Plan Sponsor about maintaining 404c protections if using foreign language sales materials.

Combination Product Materials:


o If marketing materials contain information relevant to a combination of both registered and

unregistered products, the rules for registered products prevail.

Procedures/Requirements

o Sales and marketing material must be submitted to the Marketing Review Unit in English prior to translation in a foreign language.

o Translation should not be in summary form.

o All translated material requires an indication that future communications will be in English.

This can be accomplished, in most cases by using, in substance, the following statement (in the foreign language and, if space allows, in English):

Contractual and other legal documents, other agreements, and policy maintenance information will be in English. Additional materials may also be in English. Information provided in a language other than English is for explanatory purposes only and shall not be construed to modify or change the terms of these documents, agreements and other materials, which shall be legally interpreted solely in their English versions.

o The accuracy of a translated version must be certified by a professional translation service.

o Submitters are responsible for securing the translation verification certificate and maintaining production copies of the Compliance-approved English original, the translation, and the translation certification. A copy of the Translation Certificate should be forwarded to Prudential Retirement compliance as well.

o When completed, both the English and foreign language versions of the material should be submitted to the Marketing Review Unit for recordkeeping purposes.


SEMINARS and CONFERENCES

Policy/Rule

Presentations for seminars and conferences—including scripts, detailed outlines, slides, flyers,

and invitation—must be submitted for Compliance Marketing Review prior to being used.

General Guidelines

Seminar and Conference Presentations by Prudential Retirement Sales Professional

Marketing Review will review seminar material for compliance with applicable guidelines and

ensure that the Prudential Retirement professional is clearly identified by an appropriate,

approved Prudential title and broker-dealer registration, if applicable.

All communications with the public, including public appearances shall be based on principles of

fair dealing and good faith, must be fair and balanced, and must provide a sound basis for

evaluating the facts in regard to any particular security or type of security, industry, or service.

No material fact may be omitted.

Public appearances require a full and fair description of any securities product or service

discussed including material information such as risks or costs. The speaker cannot make

exaggerated, unwarranted, or misleading statements or claims, including promises of specific

future returns or projections of investment performance. Additionally, the speaker is required to

clearly and prominently disclose that s/he is a registered representative of his/her broker/dealer if

discussing securities products and services.

Approving Presentations that Cannot Be Scripted

Guidelines for approving public appearances that cannot be scripted:

The presenter must first obtain approval from his/her Supervisory Principal,

A detailed outline of topics and talking points must be given to the SP who should

implement appropriate supervisory procedures,

Presentation with outline and talking points is submitted for Compliance Marketing

Review. Review comments are to be communicated to the sales professional,

Marketing Review must receive and review a “Final Copy” of the public appearances.


If similar subsequent public appearances are anticipated, each final copy must be

reviewed and approved by the SP or his/her designee prior to any subsequent

presentations, and

If the sales professional wishes to host subsequent public appearances, he/she must

continue to obtain SP approval prior to the public appearances. The SP will be

responsible for approving all subsequent public appearances (prior to and after

airing).

Presentations with Outside Speakers

Prior to inviting another professional to participate in a seminar, the Department Vice President

should determine if the outside speaker is reputable in his or her field.

When other professionals, such as attorneys or CPAs, act as guest speakers, they must state that

their function is to provide general information regarding tax issues and legal matters. They must

also state that the Prudential professional's job is to provide information regarding financial

products and services.

Presentations should clearly identify:

Which products and services discussed are offered by Prudential and its affiliates,

The relationship or lack of relationship between Prudential and the outside speaker,

and

Prudential as being separate from, and unaffiliated with, the speakers as well as the

business activity of the outside speakers and that Prudential does not endorse, support

or recommend the information provided by the outside speaker employees.

The following information must be communicated to every member of the audience by an

announcement, a handout and/or a prominently displayed sign:

Presenting at this seminar is [speaker's name]. S/he is an [attorney, accountant, financial planner, etc.] with the firm of [speaker's firm], which is separate from and unaffiliated with Prudential. Prudential does not endorse or recommend the advice of [speaker's name]. The statements made by [other speaker's name] at this seminar are solely [his/her/their] own and Prudential expresses no opinion with regard to them.


ELECTRONIC COMMUNICATIONS

Policy/Rule

Marketing Review must review and approve all sales material transmitted electronically

through Company-approved e-mail and Websites.

General Guidelines

Electronic communications must comply with all applicable statutes and regulations, including

but not limited to, all standards and requirements established by the SEC, the FINRA, state

insurance departments and other regulatory bodies. Prudential professionals are also required to

comply with the Corporate E-Mail and Internet policies.

The same basic tenets that govern the content of written communications apply to electronic

communications. These tenets include: truthfulness, good taste, accuracy and completeness of

information.

Retirement personnel wishing to use e-mail to communicate with the public, including clients,

must only use the e-mail system provided by the Company.

E-Mail Message Types

Outgoing e-mail should be identified as either “Marketing Sales Material or Advertising,” or

“Individual Correspondence.” Electronic Marketing Sales Material or Advertising is subject to

the same requirements as written marketing materials and submitted for Compliance Marketing

Review. Individual electronic correspondence undergoes the same Supervisory Principal

scrutiny and procedures as written correspondence.

Content and Security

Electronic messages can present privacy concerns. Electronic messages sent over the Internet

are not considered “secure” and users should assume that messages are accessible to individuals

other than the intended recipients. Therefore, proprietary or confidential information relating to

clients or the Company should not be transmitted outside the Company. This includes, for

example, personal information about a client or information not generally made public

concerning the Company’s business activities or plans.


Restrictions on Use of E-mail for Solicitation Purposes

Unsolicited e-mail transmissions are prohibited. In the instance of e-mail transmissions by the

Personal Retirement Services department, the department head must specifically approve the

sending of the e-mail transmission(s)

Licensing and Registration Issues

Prudential Retirement professionals must have the appropriate jurisdictional and product

registrations and licenses before transmitting e-mail messages intended to promote business.

In order to help verify that registered personnel have the appropriate licenses, the submission

process for each e-mail message requires completion of the top sheet identifying whether the

client is existing or prospective, as well as the client’s (or prospective client’s) state of residence.

Mass “mailings” to e-mail addresses that are intended to promote business (and for which state

licensing is normally required) may be conducted only if permissible under applicable state laws

and only if the legal state of residence of each prospective recipient is known and the legal state

of residence is either recorded on each e-mail message or summarized in a permanent record.

Internet and Intranet Sites

As with written sales and marketing material, the Company is responsible for communicating via the

Internet in a manner that is fair and accurate. Communications must consist of current

information. Outdated information should not remain posted, since it runs a high risk of being

inaccurate or misleading.

Internet/On-Line Procedures

Permissible Use

Use of Internet/on-line services is limited to business purposes only. Retirement professionals

should conduct themselves in a professional manner when using such services. The purpose for

access in the field is to obtain information, not to communicate. Inappropriate or illegal activities

such as “hacking” into other systems or copying, downloading or distributing illegal or offensive

material are prohibited.

Copyright Infringement Prohibition

Material on the Internet (including works or software) may be protected by copyright. It should

be noted that the lack of a copyright notice does not necessarily mean that material is not

protected by copyright. When in doubt, assume that the material is protected by copyright and do

not copy it. Under certain circumstances, protected materials may be copied if written permission

of the copyright holder is first obtained. Contact the Law Department for additional assistance.


Advertising and Promotional Messages

Except as permitted on Prudential Retirement’s Web site, Prudential Sales Professionals and

employees are prohibited from placing insurance, financial or investment-related advertisements,

notices or promotional messages on the Internet or any other on-line forum. This prohibition

includes, but is not limited to:

Establishing or participating in Web sites

Establishment of hyper-links to and from Prudential Web Sites

Bulletin board postings, and

Use of chat rooms

Exceptions

Exceptions to this policy may be permitted on a limited case-by-case basis. Requests for

exceptions must be in writing and signed by a Department Vice President. The request should be

forwarded to the Marketing Review Unit. In turn, Marketing Review will work with the

appropriate department to determine each potential exception’s appropriateness.

Hyperlinks

A “hyperlink” is an electronic path often displayed in the form of highlighted text, graphics or a

button that associates with another Web-page address, and allows the user to connect to the

desired Web page immediately by clicking on the link.

Prudential is responsible for the accuracy of statements on its Web site, just as we are

responsible for information reaching the public through other media. If Prudential Web pages

contain hyperlinks to materials prepared by third parties, we may be held responsible for the

information if we were involved in its preparation or if we endorse or approve the information.

To prevent information on a third-party Web site being attributed to Prudential, the information

should only be accessible after a visitor has been presented with an intermediary screen that

clearly and prominently indicates that the visitor is leaving Prudential’s Web site and that the

information subsequently viewed is not Prudential’s and that Prudential does not adopt or

endorse such information.

Reference to FINRA Website

Any person, or person associated with a broker-dealer, that refers to its membership in FINRA

on its Website, must provide a hyperlink to FINRA”s home page, www.FINRA.com. The

hyperlink must be located in close proximity to any reference reasonable designed to draw the

public’s attention to FINRA membership. This also applies to Web sites relating to a firm’s

investment banking or securities business that is maintained by or on behalf of any person

associated with the firm. Thus, if a broker-dealer’s Website has more than one reference to

FINRA membership, the firm may place the hyperlink in close proximity to any FINRA


reference that is reasonably designed to draw the public’s attention to FINRA membership.

Note: This does not create an independent obligation requiring a broker-dealer to refer to its

FINRA membership on its Web site. This applies only to the extent that a broker-dealer or firm

or person associated with a broker-dealer chooses to represent on a Web site that the firm is a

member of FINRA.

Envelope Theory

When documents were only delivered to investors in paper form, it was easy to establish

concurrent delivery by including multiple documents in one envelope. In the electronic age,

documents hyperlinked to each other are considered delivered together for purposes of meeting

delivery obligations under the federal securities laws. The underlying premise has come to be

called the “envelope theory.”

When a prospectus must accompany advertising materials, it is acceptable to embed in the

materials a hyperlink to the prospectus. Under the envelope theory, the documents are considered

delivered together. However, the prospectus that is specific to that piece must be “One Click

Away”. In addition, the click cannot lead to a list of any type, it must be the specific related

document. By extension, if an Internet banner advertisement requires a prospectus offer but

cannot accommodate one, it is acceptable if the banner ad hyperlinks to a page that includes the

prospectus offer.


TELEMARKETING and REGISTRATION REQUIREMENTS

Policy/Rule

No Prudential Retirement representative may engage in consumer solicitation of Prudential

Retirement products or services by telephone or e-mail without the express, written approval of

appropriate management and Compliance.

Guidelines

Retirement Compliance must be consulted prior to initiating outbound telephone calling for the

purpose of discussing/offering products to either 1) plan participants, or 2) employees eligible to

participate in a retirement plan.

Solicitation of PR products and services involving contact with institutional clients (i.e., existing

or prospective plan sponsors) does not require consultation or advance approval.

Outbound calling and e-mail initiatives may, in certain situations, be considered consumer

solicitation and therefore subject to restrictions under federal and state law. Specific

considerations for establishing a consumer solicitation program can be found in the Retirement

Compliance.

Considerations for telemarketing solicitation:

* Any caller, regardless of whether licensed or registered, must use telemarketing

scripts or outlines approved by the Marketing Review Unit prior to use.

* Certain legal requirements and regulatory disclosure language may need to be

incorporated into the phone-solicitation script.

* Depending on the content and/or state(s) in which the material is to be used, the

Marketing Review Unit may be required to file the script with—and sometimes await

approval from—the FINRA and/or state insurance departments.

* Telephone solicitors must disclose:

o full name

o affiliation with Prudential

o telephone number or address where they may be contacted

o that they are a registered representative of Prudential Investment Management

Services LLC (PIMS) when discussing registered products


o the insurance company’s home office location when the call discusses insurance

products and services with an individual located in New York or Washington.

Possible restrictions on telephone solicitation (which may vary from state to state):

* Limitations on permissible hours for calling.

* Prohibitions against use of devices that block caller ID.

* Requirement to ask individuals whether they wish to continue the call, and/or to

obtain prior consent from the individual if the call is to be monitored or recorded.

* For registered products, a caller may not use an alias, unless the caller has disclosed

the alias on his/her Form U-4.

Call Continuation Requirements

An individual may state that he/she is not interested or otherwise indicate that she/he does not

want to continue the call. In these cases, the call should be ended immediately. If the called party

requests to be removed from any marketing list, the caller must follow the Corporate Company

Policy- Telephone Solicitation and Do Not Call Restrictions.

Unlicensed or Unregistered Telemarketers or Marketing Assistants

Restrictions on Activities

Marketing assistants and telemarketers who are not properly licensed or registered cannot discuss

the features, terms or conditions of specific products or services. If a marketing assistant or

telemarketer is faced with a question that exceeds the scope of his or her authority, the call must

be transferred to a licensed and/or registered sales professional or be discontinued.

Unlicensed or unregistered individuals may only:

o Extend invitations to the public to attend Prudential-sponsored events such as seminars

o Inquire whether members of the public wish to receive insurance or financial product

material from Prudential, or

o Make preliminary contact with members of the public to ascertain if they wish to speak to

or schedule an appointment with a sales professional regarding insurance or financial

products.

Unsolicited Fax Transmissions

* Unsolicited fax transmissions are prohibited.

* Fax transmissions can only be made using material that has been reviewed and

approved by the Supervisory Principal and the Compliance Marketing Review Unit,

where applicable


Retirement Plans

Providing Investment-Related Information to Retirement Plan Participants

Policy/Rule

In consideration of the standards of conduct required by the Employee Retirement Income

Security Act of 1974 (ERISA), Prudential Retirement marketing sales materials do not offer

advice.

For purposes of ERISA, the Department of Labor has determined that the furnishing of the

following four categories of information and materials to a participant or beneficiary in a

participant-directed individual account pension plan will not constitute the rendering of

investment advice.

Plan Information

Information and materials that inform a participant about the following will not constitute the

rendering of investment advice:

* The benefits of plan participation,

* The benefits of increasing plan contributions,

* The impact of preretirement withdrawals on retirement income,

* The terms of the plan, or the operation of the plan, or

* Information that describes investment alternatives under the plan (e.g., descriptions of

investment objectives and philosophies, risk and return characteristics, historical

return information, or related prospectuses).

Descriptions of investment alternatives under the plan may include information relating to the

generic asset class (e.g., equities, bonds, or cash) of the investment alternatives.

General Financial and Investment Information

Information and materials that inform a participant or beneficiary about the following general

financial and investment information will not constitute the rendering of investment advice:

* General financial and investment concepts, such as risk and return, diversification,

dollar-cost averaging, compounded return, and tax-deferred investment,

* Historic differences in rates of return between different asset classes (e.g., equities,

bonds, or cash) based on standard market indices,

* Effects of inflation,


* Estimating future retirement income needs,

* Determining investment time horizons, and

* Assessing risk tolerance.

Asset Allocation Models

Information and materials (e.g., pie charts, graphs, or case studies) that provide a participant with

models, available to all plan participants, of asset allocation portfolios of hypothetical individuals

with different time horizons and risk profiles, will not constitute the rendering of investment

advice where:

* Such models are based on generally accepted investments theories that take into

account the historic returns of different asset classes (e.g., equities, bonds, or cash)

over defined periods of time,

* All material facts and assumptions on which such models are based (e.g., retirement

ages, life expectancies, income levels, financial resources, replacement income ratios,

inflation rates, and rates of return) accompany the models,

* To the extent that an asset allocation model identifies any specific investment

alternative available under the plan, the model is accompanied by a statement

indicating that other investment alternatives having similar risk and return

characteristics may be available under the plan and identifying where information on

those investment alternatives may be obtained, and

* The asset allocation models are accompanied by a statement indicating that, in

applying particular asset allocation models to their individual situations, participants

should consider their other assets, income, and investments (e.g., equity in a home,

IRA investments, savings accounts, and interests in other qualified and non-qualified

plans) in addition to their interests in the plan.

Materials discussing the GoalMaker® asset allocation program should note:

* the program is optional

* participants are welcome to establish their own asset allocation outside of the

GoalMaker program. Within the body of the text, you could use wording similar to

the following:

Other investment alternatives having similar risk and return

characteristics may be available under your plan. If you prefer, you can

create your own asset allocation without choosing GoalMaker. The

choice is yours.

Interactive Investment Materials

Questionnaires, worksheets, software, and similar materials which provide participants or

beneficiary the means to estimate future retirement income needs and assess the impact of

different asset allocations on retirement income will not constitute the rendering of investment

advice, where:


* Such materials are based on generally accepted investment theories that take into

account the historic returns of different asset classes (e.g., equities, bonds, or cash)

over defined periods of time,

* There is an objective correlation between the asset allocations generated by the

materials and the information and data supplied by the participant or beneficiary,

* All material facts and assumptions (e.g., retirement ages, life expectancies, income

levels, financial resources, replacement income ratios, inflation rates, and rates of

return) which may affect a participant's or beneficiary’s assessment of the different

asset allocations accompany the materials or are specified by the participant or

beneficiary,

* To the extent that an asset allocation generated by the materials identifies any specific

investment alternative available under the plan, the asset allocation is accompanied by

a statement indicating that other investment alternatives having similar risk and return

characteristics may be available under the plan and identifying where information on

those investment alternatives may be obtained, and

* The materials either take into account or are accompanied by a statement indicating

that, in applying particular asset allocations to their individual situations, participants

or beneficiaries should consider their other assets, income, and investments (e.g.,

equity in a home, IRA investments, savings accounts, and interests in other qualified

and non-qualified plans) in addition to their interests in the plan.

Tax Considerations

When creating sales and marketing material that discusses retirement plan distributions or other

participant choices regarding the flow of money or assets into or out of a retirement plan, keep in

mind that there are income tax implications, including dollar limitations on contributions,

restrictions on certain rollovers and transfers, imposition of state or local taxes and potential

penalty taxes on early distributions.

Such materials should first be reviewed by Tax Marketing Review, and comments incorporated,

prior to submitting for Compliance Marketing Review. When submitting for Marketing Review,

insert in the comment section of the top sheet, the name of the Tax Marketing Reviewer and Tax

Catalog Number.

Considerations include:

* The presentation of the benefits of a certain course of action, for example, rolling a

plan distribution into an IRA, must indicate that the action is one of many choices

available and other choices may be appropriate for particular situations.

* Sales and marketing material that discusses the tax-advantaged nature of a retirement

plan may require the inclusion of the associated tax consequences.


* For traditional IRA and 401(k), 403(b), profit sharing plan, money purchase plan, etc.

the following should be disclosed:

Amounts withdrawn are subject to income taxes. Withdrawals before age 59 1/2 may also be subject to a 10% federal income tax penalty and plan restrictions.

* For Simple IRAs, the following should be disclosed: Withdrawals are subject to ordinary income tax to the extent of gain and a 10% federal income tax penalty may apply prior to age 59 ½. The federal penalty increases to 25% if taken during the first two years of plan participation.

* For Roth IRAs, it should be made clear that qualified distributions are federally tax-

free, provided a ROTH account has been open for at least five tax years and the

owner has reached age 59 ½ or meets other requirements. Additionally, when

discussing the tax-free nature of distributions, the following language may be

required:

Qualified distributions are federally tax-free, provided the Roth account has been open for at least five years and the owner has reached age 59 ½ or meets other requirements Qualified Roth IRA distributions may be subject to state and local income tax.

* When a retirement plan participant receives a lump-sum distribution, generally the

distribution will be subject to ordinary income tax unless rolled over into another

retirement plan or IRA. If the participant receives the distribution in a check, the

employer must withhold 20% and any rollover must be completed within 60 days.

Trustee-to-trustee rollovers are not subject to the 20% withholding.

* When discussing distributions from any retirement plan, the following statement may

be needed if encouraging participants to consider an annuity or other insurance

product:

The sale or liquidation of any stock, bond, IRA, certificate of deposit, mutual fund, annuity, or other asset to fund the purchase of this product may have tax consequences, early withdrawal penalties, or other costs or penalties as a result of the sale or liquidation. You or your agent may wish to consult independent legal or financial advice before selling or liquidating any assets and prior to the purchase of any life or annuity products being solicited, offered for sale, or sold.

* Tax discussion may require the following:

Prudential is not a legal or tax adviser and encourages you to consult your individual legal or tax adviser with any specific questions.


Role of Non-Prudential Entities

If non-Prudential entities are mentioned in sales and marketing materials that discuss qualified

retirement plans and services, clearly identify the roles of each entity involved (e.g., who handles

the investments, and who serves as the plan administrator, trustee and custodian).

Group Variable Annuity Products

The following disclosure(s) must be prominently disclosed at the point in the material where

variable annuity product (e.g. Group Discovery Select Annuity) features are discussed—

especially when talking tax benefits.

Participant version:

You get tax deferral of your investment earnings through the qualified

retirement plan in which you participate. Because you already enjoy this

tax deferral, your decision to invest in the XYZ variable annuity should be

based on the annuity's investment and insurance features, such as the

ability to annuitize and the death benefit.

Plan Sponsor version:

Participants in your qualified retirement plan get tax deferral of their

investment earnings through the plan. Because they already enjoy this

tax deferral, your decision to select the XYZ variable annuity as an

investment option should be based on the annuity's investment and

insurance features, such as the ability to annuitize and the death benefit.


ANNUITIES ADVERTISING

Types of Individual Annuities

Sales material for annuities must clearly identify the product as either a fixed, market value or

variable annuity. The material must indicate that this product provides payment(s) upon the

contract’s annuitization as well as death benefit protection. Annuities are suitable for long-term

investment goals and should state that the guarantee is by the issuing insurance company. Claims

about guarantees should be fair and accurate.

Fixed-Rate Annuities — Book Value

When discussing fixed-rate annuities in general, indicate that the insurer guarantees the rate.

When quoting a specific rate, include the effective date, the number of years the rate is

guaranteed, that rates are subject to change and the minimum guaranteed rate. Indicate the length

of the surrender schedule.

Some fixed-rate annuities may offer a “bonus” rate. These are rate specials for a limited period

of time. They do not continue through the entire contract term.

The bonus period should be very clearly identified, as well as disclosure of the likelihood of a

reduced rate after the bonus period has expired.

Please note New York and Florida requirements in below section titled, “Bonus Credit.”

Market Value Adjusted Annuities

Market value adjusted annuities (MVAs) generally offer longer maturities and relatively higher

rates of return than book value annuities. Follow the interest rate guideline for book value

annuities and explain that MVAs are subject to market fluctuation:

Principal value will fluctuate so that an annuity, when surrendered, may be worth more or less than the original cost. In addition, in the case of early withdrawal, a surrender charge may apply, as well as a 10% federal tax penalty prior to age 59½.

Variable Annuities

Regulatory Considerations

* Variable annuities are subject to state insurance laws and security regulations.

* The sale of variable annuities is subject to prospectus delivery requirements.


* Any material intended to promote the sale of a specific variable annuity must be

consistent with the information provided in the prospectus (investment objective,

risks, minimum investment, etc.).

* Depending upon the nature of the communication, delivery of a prospectus prior to or

in conjunction with the communication may be necessary.

* Variable annuity sales material like all investment company sales material must be

filed with the FINRA and certain state Departments of Insurance.

Product Identification

Sales material must provide a balanced discussion of the insurance and investment features of

this product. Variable annuities investment options offer professional management and

diversification. They offer three primary features not commonly found in mutual funds, tax-

deferred treatment of earnings, a death benefit, and annuity payout options that can provide

guaranteed income for life.

* Variable annuities and mutual funds generally should not be compared—discussion

of annuities must be clear— not to confuse or “blur” the product with mutual funds.

* The FINRA guidelines are stringent and all material differences must be thoroughly

described (such as fees, liquidity, safety, guarantees, etc.).

Liquidity

Variable annuities must not be portrayed as short-term liquid investments. Substantial charges

and/or income tax penalties are frequently incurred for early withdrawals. Although a benefit of

a variable annuity investment is that earnings accrue on a tax-deferred basis, a minimum holding

period is often necessary before the tax benefits are likely to outweigh the higher fees imposed

on variable annuities.

A registered representative should discuss all relevant facts with the customer, including

liquidity issues such as potential surrender charges and the Internal Revenue Service (IRS)

penalty, fees, including mortality and expense charges, administrative charges, and investment

advisory fees, any applicable charges for federal, state and local government taxes attributable to

premiums, and market risk.

The registered representative should make sure that the customer understands the effect of

surrender charges on redemptions and that a withdrawal prior to age 59½ could result in a federal

income tax penalty. In addition the registered representative should make sure that customers are

informed when surrender charges apply to withdrawals.

For materials discussing withdrawals, the following or a substantially similar disclosure should

be used:

You may receive less than the original amount invested and contingent deferred sales loads may be incurred. Withdrawals of taxable amounts


are subject to ordinary income tax to the extent of gain and a 10% federal income tax penalty may apply prior to age 59½.

Annuitized income payments are taxed according to a concept known as the exclusion ratio. Part

of each payment is considered return of principal and not subject to tax. The remaining portion is

considered earnings and is taxable.

Claims About Guarantees

Insurance companies issuing variable annuities provide a number of specific guarantees. These

guarantees are set forth in the policy and discussed in the prospectus. For example, the variable

annuity issuer may guarantee a schedule of payments to a variable annuity owner (in the

distribution phase). Another example, the variable annuity issuer may guarantee a fixed

investment account option (in the accumulation phase).

The relative safety of such guarantees must not be overemphasized or exaggerated, as it depends

on the claims-paying ability of the issuing insurance company.

* Sales material must be careful that there is no representation that a guarantee applies

to the investment return or principal value of the separate account.

* Nor may any representation be made that an insurance company’s financial ratings

apply to the separate account.

Death Benefit

The death benefit provided by a variable annuity is set forth in the contract and explained in the

contract’s prospectus. The death benefit only applies during the accumulation phase of the

annuity. The death benefit typically provides heirs with the greater of account value or the

original investment minus any withdrawals. Some variable annuity products also offer a

“stepped-up” death benefit or “roll-up” death benefit, or a combination of both.

* Sales material discussing the death benefit available with a variable annuity must

indicate that the issuing insurance company guarantees the death benefit.

* It must further disclose that the guarantee does not protect against a decline in market

value that could occur prior to the death of the annuitant/owner.

* These enhanced death benefits generally have limitations on the amounts that can be

stepped-up or rolled-up. These limitations should also be discussed.


Payments to the Annuity Contract

Contractually required payments made to an annuity contract should be called “payments” or

“contract payment”. Non-contractual payments may be called “additional contributions”. Terms

such as “deposit” may not be used to describe annuity payments.

Bonus Credit

"Bonus Credit" variable annuities offer credits equal to a percentage—usually from 3% to 5%—

of the amount invested in the variable annuity contract. In order to fund these bonus credits, the

contracts usually impose high mortality and expense charges and longer surrender charge

periods. Bonus credit variable annuities communications that promote the bonus credit must also

explain that fees and expenses may be higher, and the surrender periods may be longer, than

contracts that do not provide the bonus feature.

New York Requirement

Sales material used in New York must disclose prominently not only the anticipated rewards but

also the possible disadvantages and risks of the bonus product.

The consumer must be fully informed of:

* How the bonus works, what purchase payments are eligible,

* What is the duration of the additional interest rate,

* The duration and increase in expenses and charges associated with the bonus,

* Whether the bonus product has both a higher surrender charge and/or a longer

surrender period than found in a non-bonus annuity,

* At what point in time or at what rate of return the bonus rate will exceed the value of

another annuity that does not include the bonus rate, and

* Whether the bonus rate outweighs any higher fees and charges that the product may

impose.

Florida Requirement

Sales material used in Florida that contains a bonus must disclose prominently and

conspicuously with equal emphasis as the bonus rate the following:

* Premium expense charges,

* Administrative charges,

* The full surrender charge, year by year,

* Any policy fees,


* Free withdrawal provisions or bail-out,

* Market value adjustment,

* Participation rate,

* Any other provision which affect the rate of return ultimately realized and how the

return is effected, and

* Guaranteed minimum interest rate during the accumulation and/or annuitization

period.

Colorado’s Requirement Bonus Interest

The state of Colorado prohibits an advertisement from offering a policy that provides a “bonus

interest” or similar inducement without clearly specifying the terms and conditions the applicant

must meet to earn the bonus. Furthermore, no advertisement may promote any form of “bonus

interest” as providing an off-set to the surrender charges upon the replacement of existing life

insurance or annuity product.

Dollar-Cost Averaging Fixed-Rate Option

This feature allows customers to invest initially in a fixed account of a variable annuity with an

attractive annual yield. The account is only available for lump sum investments. The lump sum is

then automatically transferred into the variable account options in equal monthly installments

over a period of six months or one year. Because all of the money must be transferred out of the

account, the high annual effective rate is paid on a declining balance and the actual return on

dollars invested is much lower than the advertised annual effective yield.

Sales materials and financial professional material must not over-emphasize the annual effective

yield figure.

* Instead, communications about these accounts should focus first on explaining how

the accounts operate, including the requirement that all monies be transferred out of

the account within a preset timeframe.

* In addition, if any type of return is mentioned in communications about the account,

the focus should be on the actual return on investment the customer can expect to

receive over the term of the account net of applicable fees and charges. The annual

effective yield figure may be disclosed provided it is not over emphasized and that it

appears in context that clearly explains that it is used to calculate the return on

investment, but does not reflect funds the customer will receive.

Communications About Variable Annuities that Contain Information About Fund

Performance Predating Inclusion in the Variable Annuity Product

Sales material may include an illustration of an underlying fund’s historical performance prior to

the time the underlying fund was offered as a variable annuity option as non-standardized

performance. There must be no significant changes to the fund at the time or after said fund


became available as a variable annuity investment option. The purpose of including such

performance is not to promote a similar, but new annuity option (i.e., a clone or model fund).

Sales material must reflect all product charges as if the series fund had been in existence. The

effective date of the variable annuity must be clearly identified.

In order to give the reader an accurate idea of the performance the variable annuity would have

experienced had the fund been available in the variable annuity, pre-dated performance must be

net of all recurring costs such as mortality and expense risk charges and annual administrative

fees. Such expenses must be based on the charges at the time the fund became an investment

option in the annuity.

Pre-dated performance that does not reflect charges may be presented as long as it is labeled as

such and the material clearly explains which charges have not been reflected. Nevertheless,

members must not overemphasize pre-dated performance that does not reflect all charges.

A sample disclosure regarding standardized and non-standardized performance would read as

follows:

This material depicts past performance, which is not indicative of future results. The investment return and principal value of your annuity may fluctuate, so that the units of the annuity that you purchased, when redeemed, may be worth more or less than what you originally paid for them. Non-standardized Average Annual Total Returns reflect hypothetical investment experience as though ABC Variable Annuity had been in existence since the inception date of the underlying portfolio and includes possible withdrawal charges and fees (describe the fees). Standardized Average Annual Total Returns are calculated from the SEC effective date of the separate account (4/17/06), and include the maximum possible withdrawal charges and fees (describe the fees). As disclosed in the prospectus, the maximum withdrawal charge is 8% of the amount withdrawn before the fourth contract anniversaries, reduced by 1% per year for the next three contract anniversaries, and declining to 0% thereafter.

Communications About Variable Annuity Subaccounts that Contain Non-Standardized Performance Information

Other reasonable measures of historical performance can be included in sales material provided that any non-standardized returns/results are accompanied by SEC standardized average annual total returns. Non-standardized performance cannot be placed in a position of greater prominence than standardized performance. Performance data must be as of the most recent practicable date.

Variable Annuity Rankings A ranking entity refers to any independent entity that provides general information about investment companies to the public. Only rankings supplied by an independent ranking entity can be used.


Prudential cannot request that a ranking be created for a particular annuity. A ranking that reflects the relative performance of the separate account of a variable annuity may be included in sales material provided that the information is consistent with the ranking guidelines for variable annuities. The use of a performance ranking of the underlying fund is not permitted because such a ranking does not deduct the charges and expenses of the separate account.


ANNUITY ILLUSTRATIONS

Purpose of Illustration

Hypothetical Illustrations may be used with the contract prospectus to demonstrate how a

variable annuity operates. The purpose of the illustration is to shows how the performance of the

underlying investment accounts could affect the contract value and death benefits. The

illustration must reflect the costs associated with the annuity, including ongoing mortality and

expense charges, administrative costs and surrender charges. These illustrations may not be used

to project or predict investment results.

Historical illustrations may also be used, subject to approval by the Marketing Review Unit.

Rate of Return

The illustration may use any combination of assumed investment returns in the underlying

investment account up to and including a gross rate of 10% (8% in New York and Oregon),

provided that one of the returns is a 0% gross investment rate of return. The purpose of the

required 0% rate of return is to demonstrate how a lack of growth in the underlying investment

accounts may affect policy values and to reinforce the hypothetical nature of the illustration.

Although the maximum assumed rate of 10% (8% in New York and Oregon), might be

acceptable, the maximum rate illustrated must be reasonable considering market conditions and

the available investment options.

In addition, preceding any illustration there must be a prominent explanation that the purpose of

the illustration is to show how the annuity operates and may not be used to project or predict

investment results.

Non-Guaranteed Rate of Return

Only those annuity illustration programs approved by Marketing Review can be used.

An advertisement shall not utilize or describe non-guaranteed interest rate in a manner that is

misleading or has the capacity or tendency to mislead and shall not state or imply that the

payment or amount of non-guaranteed interest rate is guaranteed.

The non-guaranteed interest rate(s) shall not be greater than those currently being credited by the

company unless the company has publicly declared the non-guaranteed rates with an effective

date for new issues not more than three months subsequent to the date of declaration. The


illustration must set forth with equal prominence comparable illustrations based on the

guaranteed accumulation interest rates.

Gross and Net Premiums

If an illustration states the net premium accumulation interest rate, whether guaranteed or not, it

shall also disclose in close proximity thereto and with equal prominence, the actual relationship

between the gross and the net premiums.

The illustration shall indicate that the insurer reserves the right to change any such element at

any time and for any reason. If this right is limited in any way; such as, for example, agreement

to change these elements only at certain intervals or only if there is a change in the insurer's

current or anticipated experience, the advertisement may indicate any such limitation on the

insurer's right.


BROKER-DEALER ISSUES

Broker-Dealer Identification for Securities Products

Whenever marketing material discusses securities products and services, the name of the

broker/dealer offering the product must be clearly and prominently identified.

Securities products and services are offered through Prudential Investment Management Services LLC (PIMS), Three Gateway Center, 14

th Floor, Newark, NJ 07102-4077.

The above disclosure may be tailored for individual products. Please consult with your

Marketing Reviewer. For example, where material only discusses mutual funds, the disclosure

can read: Mutual funds [instead of “securities products and services”] are offered through…

For all registered products, verify that the name of the broker/dealer is included in all marketing material. Use of the appropriate disclosure listed above and/or the use of approved Prudential stationery will satisfy this requirement. Advertising may not contain the address of the non-branch location.

Identification of the Broker/Dealer and Individuals

Any individual promoting securities must identify himself or herself in accordance with his or

her FINRA registrations as either a “Registered Representative” or a “Securities Registered

Principal.”

If a non-member entity is named in a communication in addition to the broker/dealer, the

relationship, or lack of relationship, between the broker/dealers and the entity shall be clear.

If a non-member entity is named in a communication in addition to the broker/dealer and

products or services are identified, no confusion shall be created as to which entity is offering

which products and services. Securities products and services shall be clearly identified as being

offered by the broker/dealer.

If an individual is named in a communication containing the names of a broker/dealer and a non-

member entity, the nature of the affiliation or relationship of the individual with the

broker/dealer shall be clear. The positioning of disclosure can create confusion even if the

disclosures or references are entirely accurate. To avoid confusion, a reference to an affiliation

(e.g., registered representative) shall not be placed in proximity to the wrong entity.

If a communication identifies a single company, the communication shall not be used in a

manner that implies the offering of a product or service not available from the company named.


Special FINRA Requirements for Registered Products—Use of Branch and Private Office

Addresses and Telephone Numbers

Sales Literature

Where a branch or private office sales professional wishes to include his/her branch or private

office address and/or telephone number on sales literature promoting a registered product, the

material must also include the address and telephone number of the agency office to which the

branch or private office reports or the central office of the broker/dealer.

Advertisements

Branch and private office addresses cannot be included on advertisements promoting a registered

product. However, in the event that a sales professional in a branch or private office wishes to

include his/her telephone number on advertisements promoting a registered product, the material

must also include the address and telephone number of the agency office to which the branch or

private office reports or the central office of the broker/dealer.


COMPARISON to BANK PRODUCTS and INVESTMENT

PRODUCTS DISTRIBUTED THROUGH BANKING CHANNELS

Comparison to Bank Products

Generally products available within retirement plans are not compared to bank products.

However, should comparison be made in advertisements or sales literature, the purpose of the

comparison must be made clear. Additionally, the material must provide a fair and balanced

presentation, including any material differences between the subjects of comparison. Such

differences may include investment objectives, sales and management fees, liquidity, safety,

guarantees or insurance, fluctuation of principal and/or return, tax features, and any other factors

necessary to make such comparisons fair and not misleading.

Any comparison between investment securities (including mutual funds, variable annuities,

stocks, or bonds) and, for example, CDs must disclose, at minimum, the following:

Unlike CDs, which are insured by the FDIC and offer a fixed rate of return, the principal value

and investment return of securities will fluctuate with changes in market conditions.

This information must be included in the main body of the text rather than a footnote.

Depending on the subjects of the comparison, further material differences between the products

may need to be explained. For example, if you compare a stock mutual fund to six-month CD, it

should be clear that a stock mutual fund is generally considered a long-term investment, whereas

a six-month CD is designed for short-term savings needs. Similarly, when comparing a bond

mutual fund to a CD, it is important to explain that should interest rates rise, the value of the

bond mutual fund will fall, whereas the value of the CD will remain fixed until maturity.

Comparisons to a variable annuity require a discussion of all the fees, expenses and surrender

charges, tax features and penalties, guarantees of the issuer, fluctuation of principal, and the

insurance features.

The appropriate disclosures for certain mutual fund investment alternatives should, at a

minimum, include the following:

For money market funds, investors should be advised that, an

investment in the Fund is not insured or guaranteed by the Federal

Deposit Insurance Corporation or any other government agency.

Although the Fund seeks to preserve the value of your investment at

$1.00 per share, it is possible to lose money by investing in the Fund,


* For fixed-income or bond funds, investors should receive clear disclosures that,

although such funds may pay higher rates than CDs, their net-asset values are

sensitive to interest-rate movement and a rise in interest rates can result in a decline in

the value of the customer’s investment, and

* For equity funds, while there may be less possibility that investors will confuse such

funds with an insured product such as a CD, they should be clearly advised of the

higher degree of risk to capital associated with equity mutual funds.

Products Distributed Through Banking Channels

To guard against customer confusion or misinformation, advertising material for investment

products and services distributed through a bank channel must display in a conspicuous manner

(enclose in a box) the following disclosure:

Not FDIC Insured—No Bank Guarantee—May Lose Value.

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