FINRA Announces Changes to Analyst Rules

Would eliminate need for “booster shot” provisions from lockup agreements

The Financial Industry Regulatory Authority, or FINRA, as part of its process of enacting a consolidated rulebook, announced proposed changes to its existing conflicts of interest rules regarding research analysts.

Currently, research analysts affiliated with managers or co-managers of an underwriting syndicate are prohibited from publishing research reports about an issuer within 15 days of the expiration or waiver of “lockup” agreements related to an initial public offering and many types of “follow-on” offerings. If an issuer publishes an earnings announcement, or other material news about it occurs, within 15 days of the expiration of the lockup agreements, these research analysts are prohibited from reporting on the issuer, except in limited circumstances.

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