RESEARCH

General

Investment Fund Research Reports

FINRA amended FINRA Rules 2210 (Communications with the Public) and 2241 (Research Analysts and Research Reports) to conform to the requirements of the Fair Access to Investment Research Act of 2017 (FAIR Act). The rule change creates a filing exclusion under Rule 2210 for investment fund research reports that are covered by SEC rules under the FAIR Act, and eliminates the “quiet period” restrictions in Rule 2241 on publishing a report or making a public appearance concerning such funds. The implementation date was August 16, 2019.

FINRA Regulatory Notice 19-32 (September 26, 2019): FINRA Amends Rules 2210 and 2241 to Conform to the Fair Access to Investment Research Act of 2017

 

FINRA Topic Page:  Research Analysts

 

FAQs about FINRA’s Research Conflict of Interest Rules

FINRA Research Rules Frequently Asked Questions (FAQ)

Research Analysts

Covered Investment Fund Research Reports

The SEC adopted a new rule under the Securities Act of 1933 to establish a safe harbor for an unaffiliated broker or dealer participating in a securities offering of a covered investment fund to publish or distribute a covered investment fund research report. If the conditions in the rule are satisfied, the publication or distribution of a covered investment fund research report would be deemed not to be an offer for sale or offer to sell the covered investment fund’s securities for purposes of sections 2(a)(10) and 5(c) of the Securities Act of 1933. The SEC also adopted a new rule under the Investment Company Act of 1940 to exclude a covered investment fund research report from the coverage of section 24(b) of the Investment Company Act, except to the extent the research report is otherwise not subject to the content standards in self-regulatory organization rules related to research reports. Finally, the SEC adopted a conforming amendment to rule 101 of Regulation M, and a technical amendment to Form 12b-25.

SEC Release No. 33-10580 (November 30, 2018), 83 FR 64180 (December 13, 2018): Covered Investment Fund Research Reports (Final Rule and Technical Amendment)

 

Supervision

Insider Trading

FINRA Rule 3110 (Supervision) includes a provision to help firms comply with their obligation under Section 15(g) of the Securities Exchange Act of 1934 to have policies and procedures in place reasonably designed to prevent potential insider trading. Rule 3110(d) requires that firms include in their supervisory procedures a process for reviewing securities transactions in certain types of accounts that is reasonably designed to identify trades that may violate insider trading prohibitions. When implementing these policies and procedures, firms may take a risk-based approach to monitoring transactions that takes into account their specific business models, and firms are encouraged to tailor their policies and procedures to their specific business models.

• FINRA Regulatory Notice 14-10 (March 2014):  SEC Approves New Supervision Rules

• SEC Fast Answers:  Insider Trading