FINRA Amends Rules Relating to Research Analysts and Research Reports

The Financial Industry Regulatory Authority has issued Regulatory Notice 12-49 regarding the Securities and Exchange Commission’s approval of amendments to NASD Rule 2711 and incorporated NYSE Rule 472 relating to research analysts and research reports.

Pursuant to the Jumpstart Our Business Startups Act and SEC staff guidance, the rules have been amended to allow research analysts to attend meetings with management of an issuer that meets the definition of an emerging growth company (EGC), even if investment bankers also attend the meetings. However, during the meetings research analysts must not engage in otherwise prohibited conduct, such as efforts to solicit investment banking business. These changes are effective retroactively to April 5, 2012.

The rules also have been amended to eliminate certain quiet periods after an initial public offering of an EGC, effective retroactively to April 5, 2012. Similarly, certain quiet periods relating to secondary offerings or termination of lock-up agreements also have been eliminated, effective retroactively to October 11, 2012.

More information is available here.

 


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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