Eight years in the making, the US Securities and Exchange Commission (SEC) has finally approved the Financial Industry Regulatory Authority’s (FINRA's) proposed Rule 2242 (the Rule or Rule 2242), which will regulate the activities of debt research analysts and the research reports they produce. New Rule 2242 will fundamentally change the way that FINRA member firms handle the production and dissemination of debt research reports.

The Rule begins with the core principle that there will be no “carve-out” from the definition of “debt research reports” for the materials that are produced by desk analysts or strategists. Desk analysts and debt sales and trading personnel whose written product falls within the broad definition of “debt research reports” will therefore be deemed "debt research analysts" for purposes of the Rule. At the same time, FINRA has created an exemption from many of the proscriptive aspects of the Rule for "institutional debt research."

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