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Matthias Knab, Opalesque:
The U.S. Securities and Exchange Commission has taken a significant step toward rolling back parts of the Global Research Analyst Settlement, the landmark early-2000s enforcement action that reshaped how Wall Street research and investment banking interact. In a December 5 statement, Commissioner Mark T. Uyeda welcomed the Commission's decision to amend the settlement undertakings and align the framework with today's rules-based regime.
The original settlement, struck in the wake of the dot-com bust, targeted conflicts of interest between research analysts and investment bankers at 12 major broker-dealers. It imposed highly prescriptive structural "walls" and conduct requirements to separate research from banking. Because it was crafted as an enforcement settlement rather than through rulemaking, those undertakings never went through a full notice-and-comment process and were always meant to be revisited as regulation evolved.
Since then, the regulatory landscape has changed dramatically. The SEC adopted Regulation AC, requiring research analysts to certify their views and disclose compensation conflicts, while FINRA introduced Rule 2241 in 2015, a more principles-based standard governing research conflicts, disclosures and supervision. In parallel, European and U.K. rules on research unbundling and payments have added further layers of complexity for global broker-dealers.
Uyeda's statement...................... To view our full article Click here
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