FINRA Proposes New Debt Research Rule
On November 14, 2014, the Financial Industry Regulatory Authority, Inc. (“FINRA”) filed with the SEC a proposed rule change to adopt new FINRA Rule 2242 (Debt Research Analysts and Debt Research Reports) to address conflicts of interest relating to the publication and distribution of debt research reports. In a companion filing, FINRA also proposed a new equity research rule, FINRA Rule 2241 (Research Analysts and Research Reports), that we previously discussed in a separate memorandum, which can be found here.
Proposed Rule 2242 incorporates a substantial portion of the equity research rules as a basic framework for debt research distributed to retail investors, with certain modifications to reflect the different manner in which equity securities and debt securities are traded.