FINRA Proposes Rule Changes to Address Research Analyst Conflicts of Interest
On November 14, 2014, FINRA filed with the SEC a proposed rule change to adopt NASD Rule 2711 (Research Analysts and Research Reports) as new FINRA Rule 2241, with several important modifications.
While the proposed Rule change retains the core provisions of the current rules, it broadens the obligations on FINRA members to identify and manage research-related conflicts of interest and clarifies the applicability of the existing rules. Most importantly, the proposed Rule change significantly shortens the blackout periods during which FINRA members may not publish or distribute equity research reports or make public appearances relating to the issuer and completely eliminates the blackout periods before and after the expiration, waiver or termination of a lock-up agreement.