On June 24, 2016, FINRA proposed amendments to its communications rule, Rule 2210, to help clarify the application of Rule 2210 to debt research reports, in light of the new debt research rule, Rule 2242. The implementation date for the proposed amendments is July 16, 2016, which is the current effective date for Rule 2242.
The proposed amendments help clarify Rule 2210 in four main respects. First, the proposed amendments would (1) streamline the scope of approval permitted by supervisory analysts to specifically reference the definition of “debt research report” in Rule 2242(a)(3) and (2) add a specific reference to the exceptions to such definition under Rule 2242(a)(3)(A), thus making the references to debt research-related retail communications consistent with the references to equity research-related retail communications. The proposed amendments also would maintain the ability for a supervisory analyst to approve other research communications (e.g., research on options), provided that the supervisory analyst has technical expertise in the product area and any other required registrations for such product. Second, the proposed amendments would make the exception from pre-use approval requirements under Rule 2210(b)(1)(D)(i) consistent for debt and equity research communications. Third, the proposed amendments would (1) except debt research reports from the disclosure requirements of Rule 2210(d)(7) (applicable to retail communications that include a recommendation of securities) and (2) except public appearances by debt research analysts from the disclosure requirements of Rule 2210(f)(2) (applicable to an associated person recommending a security) for consistency purposes. Fourth, the proposed amendments would make technical changes to Rules 2210(d)(7) and (f)(5) to make the rule language more readable.
The text of the proposed amendments to Rule 2210 is available at: http://www.finra.org/sites/default/files/rule_filing_file/SR-FINRA-2016-021.pdf