In the fourth quarter of 2012, FINRA published Regulatory Notice 12-42 (the “Revised Proposal”), amending its proposal for substantive regulation of fixed-income research by FINRA-member firms. The Revised Proposal represents the revision of FINRA’s earlier proposal, and modifies that proposal in meaningful ways.
Executive Summary -
The Revised Proposal amends FINRA’s earlier proposal. In particular, the Revised Proposal:
- Creates a new tier of institutional account that would not be required to affirmatively opt-in to receive institutional fixed income research, which is exempt from the Revised Proposal’s requirements for research distributed to retail investors. This “higher-tier” exemption would be available to Qualified Institutional Buyers that have indicated that they are exercising independent judgment in making investment decisions. Other institutional investors that do not satisfy the higher-tier requirements would have to affirmatively consent to receive institutional research, as required of all institutional investors under FINRA’s earlier proposal.
- For firms with small proprietary fixed-income trading operations, creates an exemption from certain requirements.
Please see full publication below for more information.
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