SEC Delays Action on FINRA Rule Change Regarding Adoption of Debt Research Rule

The SEC's "Notice of Designation of a Longer Period for Commission Action on Proceedings to Determine Whether to Approve or Disapprove a Proposed Rule Change to Adopt FINRA Rule 2242" was published in the Federal Register.

Rule 2242 would address conflicts of interest involving the publication and distribution of debt research reports. According to FINRA's proposal, the rule would adopt a tiered approach in order to provide retail debt research recipients with "extensive protections" that are similar to those provided to recipients of equity research under current and proposed FINRA rules. It would also incorporate modifications to reflect differences in the trading of debt securities.

The SEC received four additional comment letters regarding Amendment No. 1 to FINRA's proposal, which was filed on February 19, 2015. FINRA responded to the comments in a letter on May 5, 2015. The SEC designated July 22, 2015 as the date by which it will approve or disapprove the proposed rule change. The date was chosen to afford enough time for the SEC to consider the comment letters and FINRA's response.