NASD And NYSE Propose Amendments To Research Analyst Rules

Recently, the New York Stock Exchange LLC (the "NYSE") and the National Association of Securities Dealers, Inc. (the "NASD") (collectively, the "SROs") proposed amendments to their rules governing the activities of research analysts ― NYSE Rule 472 and NASD Conduct Rule 2711.¹ The rule amendments are intended, in large part, to implement recommendations contained in the December 2005 Joint Report by the NASD and the NYSE on the Operation and Effectiveness of the Research Analyst Conflict of Interest Rules² and to codify within the rules existing interpretations of the SROs’ research analyst rules contained in Joint Memoranda previously issued by the NASD and NYSE.³

While the proposed amendments are very similar in many respects, the NASD and NYSE have proposed different approaches to treating quiet periods and analyst personal trading, although both state that, after receiving public comment, they expect to adopt uniform rules. These differing approaches are discussed further below.