Barclays Will No Longer Be Sending Its Debt Research to the Media
Inside Barclays' Reorganization Plans
Warning: Media-navel gazing ahead.
Financial market reporters covering U.S. stocks have known for a long time that before they speak to a research analyst they will, in all likelihood, be sent a bevy of disclosures by the analyst's employer. What is less known is that new rules recently published by Finra and approved by the U.S. Securities and Exchange Commission require similar measures be put in place for debt research.
As law firm Shearman & Sterling LLP put it in a recent client note: "Firms that produce analysis falling within the rule’s definition of 'debt research report' may face significant new regulatory obligations depending on applicable exemptions." Those include "requirements for policies and procedures imposing information barrier/institutional safeguards between persons producing fixed-income research reports and personnel in investment banking, sales and trading and principal trading functions," as well as disclosures similar to those required for equity research.
As hinted above, however, there are exemptions that will free research houses from the tyranny of added bureaucracy. One of those is the so-called "Exemption for Debt Research Reports Provided to Institutional Investor."