NASD Notice to Members 02-39 - July 2002

SEC Approves Rule Governing Research Analysts' Conflicts of Interest

Executive Summary

On May 10, 2002, the SEC approved new NASD Rule 2711, Research Analysts and Research Reports. The rule is intended to improve the objectivity of research and provide investors with more useful and reliable information when making investment decisions. The SEC also approved on that day similar proposed amendments to New York Stock Exchange (NYSE) Rule 472. The rules will be implemented in phases during the period from July 9, 2002, to November 6, 2002.

 

This Notice includes as Attachment A the text of the new rule and the implementation schedule of the rule's effective dates. This Notice also includes as Attachment B a Joint Memorandum of NASD and the NYSE that provides interpretive guidance for the NASD and NYSE rules governing research reports and analysts.

 

Questions or comments concerning NASD Rule 2711 or this Notice may be directed to the NASD Corporate Financing Department at (240) 386-4623.