Average life of investment disclosure is optional when advertising a cmo tranche.
FINRA sets minimum disclosure requirements when advertising a CMO tranche. It requires disclosure of the:
Coupon
Anticipated Yield and Average Life
Specific Tranche ID – Number and Class
Final Maturity Date
Underlying Collateral
In addition, FINRA requires the following statement:
"The yield and average life shown above consider prepayment assumptions that may or may not be met. Changes in payments may significantly affect yield and average life. Please contact your representative for information on CMOs and how they react to different market conditions.”
Then FINRA states that the following disclosures are optional:
Minimum Denomination
Rating
Agency / Government Backing
Income Payment Structure
Generic Description of Tranche (e.g., PAC, Companion)
Yield to maturity of CMOs Offered at Par
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