SIFMA on analyst coverage: Wipe out blackouts

SIFMA on analyst coverage: Wipe out blackouts
Securities association wants SEC, Finra to revisit restrictions on firms' research of smaller IPOs; states oppose the idea
MAY 02, 2012
By  DJAMIESON
The Securities Industry and Financial Markets Association wants regulators to give securities firms a freer hand in covering the IPOs of emerging growth companies as defined in the JOBS Act. In letters sent on Friday to the Securities and Exchange Commission and the Financial Industry Regulatory Authority Inc., Sifma said that current restrictions on the production of research reports and analyst communications conflict with provisions in the JOBS Act. SIFMA also wants the SEC to negate portions of the 2003 Global Research Settlement that it says are inconsistent with the JOBS Act. Finra Rule 2711 restricts how analysts produce research reports and interact with investment bankers. But the JOBS Act, signed into law by President Obama on April 5, prohibits the SEC or Finra from adopting or maintaining restrictions on analysts in covering companies with under $1 billion in revenue. "We urge Finra to amend Rule 2711 to give effect to the JOBS Act or otherwise provide specific guidance," SIFMA said in its letter to Finra. Specifically, the Wall Street trade group said that research blackouts around lock-up periods should be eliminated. And it wants follow-on offerings included under the relaxed rules. In addition, SIFMA asked the SEC to "issue a rule superseding the portions of the Global Research Settlement that are inconsistent with the spirit of the JOBS Act." The research settlement covered 10 securities firms, whIch agreed to pay nearly $1.4 billion for fines, independent research and investor education. The case arose from analysts recommending stocks of investment banking clients despite personal beliefs to the contrary. The settlement contains restrictive provisions similar to the Finra rule. State regulators on Tuesday said they opposed SIFMA's efforts. “These [settlement] standards were put in place in response to enforcement actions brought by state and federal regulators to address a culture of corruption on Wall Street that allowed conflicted research to taint the investment process," Jack Herstein, president of the North American Securities Administrators Association Inc., said in a statement today. "Now is the time to strengthen the protection of investors, not weaken these standards,” he said. Finra spokeswoman Michelle Ong declined to comment. SEC spokesman John Nester had no immediate reaction to the Sifma letter. A spokesman for Sifma did not respond to requests for comment Tuesday.

Latest News

Business-focused wealth tech RISR lands $8B Wealthcare Capital Management partnership
Business-focused wealth tech RISR lands $8B Wealthcare Capital Management partnership

Fintech platform interVal has also introduced a new feature to help advisors support entrepreneurial business owner clients better.

LPL boosts revenue potential with amped-up alts platform
LPL boosts revenue potential with amped-up alts platform

Along with greater revenue, alternative investments also carry risks, one industry lawyer noted.

Powell heads for hot-seat hearings with ongoing pressure from Trump policies
Powell heads for hot-seat hearings with ongoing pressure from Trump policies

The Fed chair is in for some "hyper-charged" meetings, with legislators likely to raise questions on tariff threats and apparent steps to comply with anti-DEI orders.

Financial advisors react to the idea of 'parent money'
Financial advisors react to the idea of 'parent money'

A new article about baby boomers supporting their adult children has wealth managers buzzing.

Revealed: The InvestmentNews Top Advisors for 2025
Revealed: The InvestmentNews Top Advisors for 2025

Driven by long-term vision and a steadfast commitment to client service, the top-ranking advisors are reaching new heights of success.

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.

SPONSORED Why wealth advisors should care about the future of federal tax policy

Blue Vault features expert strategies to harness for maximum client advantage.