SEC approves long-anticipated FINRA research rules

Abstract

Purpose

To analyze the changes to the FINRA equity research rules and evaluate concerns that may be important to and have an impact on equity research activities following the effective date.

Design/methodology/approach

This article provides an overview of the changes reflected in FINRA Rule 2241 pertaining to equity research analysts and research reports, as well as changes to licensing requirements for equity research analysts. It highlights potential issues for firms and provides some commentary on how these issues should be considered in light of FINRA’s articulated position and assurances FINRA has given to the SEC.

Findings

This article concludes that firms should anticipate these changes and begin a comprehensive review of research policies and procedures, the personnel who prepare research reports and the scope of their research products so as to be compliant with Rule 2241 from its effective date. Firms should also begin an investigation of technologies used to gather, produce and disseminate research and required disclosures to ensure they meet the new requirements when they are effective.

Originality/value

This article provides insight into the new FINRA Rule 2241 and practical guidance from experienced securities lawyers.

Citation

Kroll, A.N. and Ayanian, J. (2016), "SEC approves long-anticipated FINRA research rules", Journal of Investment Compliance, Vol. 17 No. 1, pp. 39-44. https://doi.org/10.1108/JOIC-08-2015-0058