Earlier this week, FINRA released its annual Regulatory and Examinations Priorities Letter, where it identified sales practice related to alternative mutual funds as an area of focus in the coming year. In light of the lack of a standard definition of “alternative fund,” the letter suggested that “firms refer to such funds based on their specific strategies, as opposed to bundling them under one umbrella category.” FINRA also suggested that firms review communications regarding alternative funds for consistency with information presented in the funds’ prospectuses, specifically emphasizing the importance of indicating that there is no guarantee that objectives stated in the prospective will be achieved. FINRA raised concerns that firm representatives and investors may not fully understand how the alternative funds will react to various scenarios. According to the letter, FINRA also is concerned that firms are not putting the funds through a “new-product review process,” particularly where the firm has a pre-existing relationship with the fund’s sponsor.