Client Alert

SEC Approves FINRA Rules Governing Fairness Opinion Practice

October 30, 2007

Charles Baker and Karoline Hinga

The SEC recently approved new Rule 2290 proposed by the Financial Industry Regulatory Authority, Inc. (FINRA, formerly known as the NASD), which requires FINRA members to (1) include expanded disclosure in their fairness opinions, and (2) establish written procedures governing the approval of such opinions. The substantive and procedural requirements set forth in the new rule are intended to address conflicts of interest concerns with respect to the delivery of fairness opinions by FINRA members.

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