United States

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.

COMMENT PERIOD

As of the date of this advisory, the proposed rule amendments have not been published in the Federal Register. Publication in the Federal Register, however, is anticipated in the near term. Currently, the comment period has not been determined.

However, Securities and Exchange Commission ("SEC") and SRO staff indicate that it is anticipated that they will use either a 21 or 30-day comment period. Copies of the respective filings can be found on the NASD’s and NYSE’s websites.

CURRENT RESEARCH ANALYST RULES

Generally, the SRO research analyst rules address the potential conflicts of interest associated with research analysts who work for brokerage firms that also are engaged in the investment banking business. The current research analyst rules are largely a result of the research analyst controversy that erupted in 2002⁴ and mandates in the Sarbanes-Oxley Act.⁵ The SRO rules establish safeguards to separate research analysts from pressure or oversight from investment banking personnel and to limit company influence over research analysts.

The SRO research analyst rules include the following elements:

Restrict the relationship between the research and investment banking departments of a broker-dealer;

Restrict personal trading by research analysts;

Limit communications between research analysts and companies that they cover;

Impose quiet periods on the issuance of research reports around public offerings;

Restrict research analysts from soliciting investment banking business or marketing investment banking transactions; and

Require disclosures in connection with research reports and public appearances.⁶

SRO rules also require research analysts to register as a research analyst with the respective SROs and pass a qualification examination (Series 86/87).⁷

The NASD and the NYSE have jointly issued interpretive guidance regarding the rules. This guidance defines various terms used in the rules (such as "public appearance," "research report," "investment banking services," and "equity security") and addresses issues regarding disclosure requirements, compendium reports and third-party research.⁸

SRO RESEARCH ANALYST REPORT

When the SEC approved the research analyst rules, the SEC requested that each SRO reassess the rules after they had been in place. Late last year, the SROs evaluated their current rules and issued a report to the SEC.9 Many of the proposed amendments are intended to implement the report’s findings.

SUMMARY OF THE PROPOSED AMENDMENTS

The rule amendments propose to expand some elements of the research analyst rules and curtail others. Attached is a chart that summarizes the most substantive proposed amendments to the research analyst rules. (See Appendix)

The SROs have collectively proposed several amendments to the existing research analyst rules. Some of the areas in which the SROs have proposed rule changes are:

A definition of "research report" that excludes sales material regarding open-end registered investment companies that are not listed or traded on an exchange and public direct participation programs (the SROs also requested comment on whether exchange-traded funds should be excluded from the definition of research report as well);

A limited exemption from applicable SRO research analyst licensing requirements for nonresearch personnel that produce research reports;

Innovative Internet-based methods to disclose some conflicts of interest on research reports and a proposed definition of "conflict of interest" (the SROs also requested comment on whether the proposed alternative forms of disclosure should be used for public appearances by research analysts);

Rules to prohibit retaliation by any employees (not just investment banking employees) against research analysts;

Changes to applicable quiet periods;

Modifications to the limits on personal trading by research analysts;

Clarification of the definition of "research analyst account;" and

Extending the prohibition on communications regarding investment banking transactions by research analysts to all internal sales personnel.

DIVERGENT NASD/NYSE APPROACHES

While the NYSE and the NASD rule proposals are very similar in many respects, the proposals offer differing approaches in two main areas: (1) quiet periods and (2) personal trading by research analysts. The NYSE and NASD intend to use the views expressed by public commenters to draft a uniform set of joint rules on these issues.

Quiet Periods

Currently, the research analyst rules prohibit the issuance of research reports during quiet periods after a public offering of securities and before and after the expiration, waiver or termination of a lock-up agreement that restricts the sale of securities by a company or its shareholders.

Public Offerings

Under the current research analyst rules, a member firm that acted as a manager or co-manager of an initial public offering ("IPO") may not publish or otherwise distribute research for 40 days following the date of the offering, while all other members that participated as an underwriter or dealer in the offering are subject to a 25-day quiet period.¹⁰ The NYSE and the NASD both agree that the quiet periods should be the same for all distribution participants and have proposed that the quiet period for all underwriters and dealers participating in an IPO should be 25 days.

The current research analyst rules also impose a 10-day quiet period on the manager and comanager of a secondary offering.¹¹ The NYSE and the NASD both propose to eliminate the quiet period for secondary offerings.

Lock-Ups

The NYSE and NASD offer different approaches concerning the quiet period surrounding lock-up agreements. Currently, managers and co-managers of a securities offering are subject to a 15- day quiet period prior to and after the expiration, waiver or termination of a lock-up.¹² The provision has caused logistical problems for many broker-dealers because the terms of lock-up agreements can be complex and the process for waivers may be informal. The NYSE proposes to reduce the quiet period surrounding the expiration, termination or waiver of a lock-up agreement from 15 days to 5 days. The NASD has proposed to eliminate quiet periods surrounding the expiration, waiver or termination of a lock-up agreement entirely, so long as the member firm provides to the NASD a certification stating that the member has a bona fide reason for issuing the research report.

The NASD believes that imposing quiet periods can impede the flow of essential information to the marketplace, and that the other provisions of the research rules provide adequate protection against biased research reports. The NYSE continues to believe the period around the release of lock-up agreements provides an opportunity for manipulative activity.

Public Company Earnings Announcements

The NYSE proposes to permit research reports to be issued during any quiet period. If the company issues an earnings announcement, so long as the research report is pre-approved in writing by legal or compliance personnel. The NASD proposes to keep the current rule, which allows legal or compliance personnel to approve issuance of research reports following the issuance of material news, but which (unaccountably) does not presume that earnings announcements are material.

Personal Trading by Research Analysts

The NYSE and the NASD also proposed different approaches regarding personal trading by research analysts. The current research analyst rules generally restrict the trading of securities by research analysts except under certain circumstances.¹³ For example, under the SROs’ rules a research analyst is, among other things, permitted to buy and sell securities due to unanticipated significant changes in the analyst’s personal financial circumstances and to invest in shares of certain diversified registered investment companies.

The NYSE and the NASD have both proposed amendments that would permit research analysts to divest their holdings in an orderly and controlled manner upon the adoption of an ownership ban by their employer firm. The NYSE and NASD also have proposed to amend the exception from the personal trading prohibition for the purchase and sale of certain investment fund shares. The NYSE and NASD, however, take different approaches to their proposed amendments in this area.

Currently, a research analyst may only invest in an investment fund if (1) neither the analyst nor a household member of the analyst has any investment discretion or control over the fund, (2) the research analyst’s investment accounts collectively own no more than 1% of the investment fund’s assets, and (3) the investment fund invests no more than 20% of its assets in securities of issuers principally engaged in the same types of businesses as companies that the analyst follows.¹⁴ The NASD has proposed to eliminate from the exception the requirement that a fund invest no more than 20% of its assets in securities of issuers principally engaged in the same types of businesses as companies that the analyst follows.¹⁵ The NYSE has proposed to retain this requirement.¹⁶

The NASD argues that deleting the asset diversification provision will allow analysts to invest in funds, such as hedge funds, that do not publish their holdings. The NYSE believes that the asset diversification requirement helps to limit potential conflicts of interests. Both SROs have requested comment on whether to retain or delete this provision.

CODIFICATION OF EXISTING SRO INTERPRETIVE POSITIONS

Over the past four years the NYSE and the NASD have published two joint interpretations relating to NYSE Rule 472 and NASD Conduct Rule 2711.¹⁷ The SROs’ rule amendments propose to codify these interpretive positions within the research analyst rules. These amendments are immediately effective upon filing with the SEC.¹⁸

Specifically, the SROs proposed to codify existing interpretations regarding the definition of an "equity security," "member of a research analyst’s household," "public appearance," and "research report" as well as interpretive positions regarding certain disclosure requirements, compendium reports and third-party research.

* * *

Broker-dealers that have both research and investment banking departments should review the proposed amendments to the research analyst rules. In particular, broker-dealers should consider filing comment letters regarding how the SROs should amend the quiet period and personal trading elements of the rules.

Footnotes
^{1 The proposed rule changes are contained in four separate filings. One filing each by the NYSE and NASD codifies the existing interpretations. See SR-NYSE-2006-77 and SR-NASD-2006-112. One filing each by the NYSE and NASD implements the recommendations of the Joint Report. See SR-NYSE-2006- 78 and SR-NASD-2006-113.
2 A copy of the Joint Report is available on-line at: ^{http://www.nasd.com/web/groups/rules_regs/documents/rules_regs/nasdw_015803.pdf}^.
3 See NASD Notice to Members 02-39 (July 2002); NASD Notice to Members 04-18 (March 2004); NYSE Information Memo 02-26 (June 26, 2002); and NYSE Information Memo 04-10 (March 9, 2004).
4 See generally SEC Press Release: SEC, NY Attorney General, NASD, NASAA, NYSE and State Regulators Announce Historic Agreement To Reform Investment Practices, No. 2002-179 (Dec. 20, 2002). Available on-line at: ^{http://www.sec.gov/news/press/2002-179.htm}
^{5 See Section 501 of SOA. Separately, the SEC issued Regulation AC, 17 C.F.R. § 242.500 through 242.505, to require research analysts to certify that their reports accurately reflect their personal views.
6 See generally NASD Conduct Rule 2711 and NYSE Rule 472.
7 See NASD Membership and Registration Rule 1050 and NYSE Rule 344.
8 See NASD Notice to Members 02-39 (July 2002); NASD Notice to Members 04-18 (Mar. 2004); NYSE Information Memo 02-26 (Jun. 26, 2002); and NYSE Information Memo 04-10 (Mar. 9, 2004).
9 See Joint Report by the NASD and the NYSE on the Operation and Effectiveness of the Research Analyst Conflict of Interest Rules (Dec. 2005).
10 See NYSE Rule 472(f) and NASD Conduct Rule 2711(f).
11 Id.

12 See NYSE Rule 472(f)(4) and NASD Conduct Rule 2711(f)(4).
13 See NYSE Rule 472(e)(4) and NASD Conduct Rule 2711(g)(5).
14 See NASD Conduct Rule 2711(g)(5)(B) and NYSE Rule 472(e)(4)(v).
15 Under the NASD’s proposed amendments, the personal trading restrictions would not apply to investments by a research analyst in any fund (including a registered diversified investment company), so long as neither the analyst nor a member of his or her household is aware of the fund’s holdings or transactions ^{other than through periodic shareholder reports and sales material based on such reports, and provided that the research analyst account owns no more than 1% of the assets of the fund. See Proposed NASD Conduct Rule 2711(g)(5).}
16 See SR-NASD-2006-113 and SR-NYSE-2006-78.
17 See NASD Notice to Members 02-39 (Jul. 2002); NASD Notice to Members 04-18 (Mar. 2004); NYSE Information Memo 02-26 (Jun. 26, 2002); NYSE Information Memo 04-10 (Mar. 9, 2004).
18 See SR-NYSE-2006-77, SR-NASD-2006-112.
Circular 230 Disclosure: Internal Revenue Service regulations provide that, for the purpose of avoiding certain penalties under the Internal Revenue Code, taxpayers may rely only on opinions of counsel that meet specific requirements set forth in the regulations, including a requirement that such opinions contain extensive factual and legal discussion and analysis. Any tax advice that may be contained herein does not constitute an opinion that meets the requirements of the regulations. Any such tax advice therefore cannot be used, and was not intended or written to be used, for the purpose of avoiding any federal tax penalties that the Internal Revenue Service may attempt to impose.
APPENDIX
NASD/NYSE Representative List of Substantive Proposed Amendments to the Research Analyst Rules

Rule Requirement (NASD/NYSE)

Current Elements

NASD Proposed Changes

NYSE Proposed Changes

Rule Cite

Definition of Research Report

Research Report is currently defined as a written or electronic communication which includes an analysis of equity securities of individual companies or industries, and provides information reasonably sufficient upon which to base an investment decision.

Proposal would expressly exclude from the definition of research report sales material regarding open-end registered investment companies that are not listed or traded on an exchange and public direct participation programs.

NASD Rule
2711(a)(9)
NYSE Rule
472.10(2)

Definition of Research Analyst

A research analyst is currently defined as a person who is primarily responsible for the preparation of the substance of a research report or whose name appears on a research report.

Proposal would create a limited exemption from the registration requirements for nonresearch personnel that produce research reports. Therefore, the definition of "research analyst" would apply only to those persons whose primary job function is to provide investment research.

NASD Rule
1050(b)
NYSE Rule
344

Review of Research Reports Prior to Publication

Currently, investment banking and other non-research employees, other than legal and compliance personnel, may review a research report before publication only to verify the factual accuracy of information in the report or identify a potential conflict of interest.

The proposed amendments would eliminate the pre-publication review of research by investment banking and other non-research personnel, other than by legal and compliance.

NASD Rule
2711(b)
NYSE Rule
472(b)(3)

Quiet Periods – IPOs

Currently, a member that acted as a manager or co-manager of an IPO may not publish or otherwise distribute research for 40 calendar days following the date of the offering; all other members that participated as an underwriter or dealer in the offering are subject to a 25-day quiet period.

The proposed amendments would apply a 25-day quiet period to managers, comanagers, underwriters and dealers that participate in an IPO.

NASD Rule
2711(f)
NYSE Rule
472(f)

Quiet Periods – Secondary Offerings

A 10-day quiet period applies only to the manager and co-manager of a secondary offering.

The proposed amendments would eliminate the quiet periods following a secondary offering.

NASD Rule
2711(f)
NYSE Rule
472(f)

Quiet Periods - Expiration, Waiver or Termination of a Lock-up Agreement

Currently, the quiet period surrounding the expiration, termination or waiver of a lock-up agreement is 15 days.

The NASD proposed amendments would eliminate the quiet periods around the expiration, waiver or termination of a lock-up agreement provided that members certify to the NASD that they have a bona fide reason for issuing a research report within 15 days before and after a lock-up expiration.

The NYSE proposed amendments would decrease the quiet period surrounding the expiration, termination or waiver of a lock-up agreement to 5 days.

NASD Rule
2711(f)
NYSE Rule
472(f)

Quiet Periods - Exceptions

The current rule contains an exception that permits publication and distribution of research or a public appearance concerning the effects of significant news or a significant event on the subject company during the quiet period.

The NASD did not propose any amendments to this provision.

The NYSE proposed amendments would include earnings announcements within the exception to the quiet period for significant news or events.

NASD Rule
2711(f)
NYSE Rule
472(f)

Personal Trading by Research Analysts

The current rules contain exceptions to the trading restrictions applicable to research analysts for certain trades that involve interests in an investment fund over which neither the analyst nor a household member has any investment discretion or control, the research analyst accounts collectively own no more than 1% of the fund’s assets, and the fund invests no more than 20% of its assets in securities of issuers principally engaged in the same types of business as companies that the analyst follows.

Under the NASD proposed amendments, the personal trading restrictions would not apply to investments in any fund (including a registered diversified investment company), so long as neither the analyst nor a member of his or her household is aware of the fund’s holdings or transactions other than through periodic shareholder reports and sales material based on such reports, and provided that the research analyst account owns no more than 1% of the assets of the fund. Therefore, the proposed amendments would eliminate the 20% asset diversification threshold from the exception.

The NYSE did not propose any amendments to the exception.

NASD Rule
2711(g)(5)
NYSE Rule
472(e)(4)

Personal Trading by Research Analysts - - Exceptions

The current rules contain certain exceptions to the general prohibition on trading by research analysts.

The proposed rule would revise the exceptions to the personal trading restrictions to create an exemption for members that voluntarily choose to prohibit their analysts from owning shares of the companies they cover. The proposed rule would allow such a firm to adopt policies and procedures that permit research analysts to divest their holdings in an orderly and controlled manner with the oversight of the firm’s legal and compliance personnel.

NASD Rule
2711(g)(5)
NYSE Rule
472(e)(4)

Disclosure Requirements

The current rules impose a number of disclosure requirements on member research reports and research analyst public appearances in which the analyst makes a recommendation or offers an opinion concerning an equity security.

The proposed rules would amend the rules to permit members, in lieu of publication in the research report itself, to disclose their conflicts of interest by including a prominent warning on the cover of a research report that such conflicts of interest exist, together with information on how the reader may obtain more detail about these conflicts on the member’s web site. Members would be required to include detailed conflicts information on its web site.

NASD Rule
2711(h)
NYSE Rule
472(k)(1)

Definition of Conflict of Interest

Conflict of interest is not currently a defined term.

The proposed rules would define "conflict of interest" to include any of the circumstances that currently require disclosure under NASD Rule 2711(h) and NYSE Rule 472(k)(1).

NASD Rule
2711(h)
NYSE Rule
472(k)(1)

Retaliation

The current rules prohibit any member organization and any employee of a member organization who is involved with the member organization’s investment banking activities from directly or indirectly retaliating against a research analyst as a result of an unfavorable research report or public appearance that may adversely affect the member organization’s current or prospective investment banking relationship with a subject company.

The proposed rule change extends the retaliation prohibition to all employees, not just those involved in investment banking activities.

NASD Rule
2711(j)
NYSE Rule
472(g)(2)

Definition of Research Analyst Account – New Exclusion

The current rules set forth the trading restrictions and applicable exclusions to research analyst accounts.

The proposed amendments would amend the definition of "research analyst account/research analyst" to clarify that it excludes an investment company registered under the Investment Company Act of 1940 over which the research analyst or household member has no financial interest in such investment company, other than a performance or management fee.

NASD Rule
2711(a)(7)
NYSE Rule
472.40

Research Analyst Communication in Presence of Investment Banking and Sales Personnel

A research analyst is currently prohibited from, among other things, engaging in any communication with a current or prospective customer(s) in the presence of investment banking department personnel or company management about an investment banking services transaction.

The proposed amendments would extend the prohibition on research analysts from engaging in communications about an investment banking services transaction with a current or prospective customer in the presence of investment banking department personnel or company management to communications with internal sales personnel.

NASD Rule
2711(c)(5)(B)
NYSE Rule
472(b)

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NASD And NYSE Propose Amendments To Research Analyst Rules

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Finance and Banking

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Rule Requirement (NASD/NYSE)	Current Elements	NASD Proposed Changes	NYSE Proposed Changes	Rule Cite
Definition of Research Report	Research Report is currently defined as a written or electronic communication which includes an analysis of equity securities of individual companies or industries, and provides information reasonably sufficient upon which to base an investment decision.	Proposal would expressly exclude from the definition of research report sales material regarding open-end registered investment companies that are not listed or traded on an exchange and public direct participation programs.		NASD Rule 2711(a)(9) NYSE Rule 472.10(2)
Definition of Research Analyst	A research analyst is currently defined as a person who is primarily responsible for the preparation of the substance of a research report or whose name appears on a research report.	Proposal would create a limited exemption from the registration requirements for nonresearch personnel that produce research reports. Therefore, the definition of "research analyst" would apply only to those persons whose primary job function is to provide investment research.		NASD Rule 1050(b) NYSE Rule 344
Review of Research Reports Prior to Publication	Currently, investment banking and other non-research employees, other than legal and compliance personnel, may review a research report before publication only to verify the factual accuracy of information in the report or identify a potential conflict of interest.	The proposed amendments would eliminate the pre-publication review of research by investment banking and other non-research personnel, other than by legal and compliance.		NASD Rule 2711(b) NYSE Rule 472(b)(3)
Quiet Periods – IPOs	Currently, a member that acted as a manager or co-manager of an IPO may not publish or otherwise distribute research for 40 calendar days following the date of the offering; all other members that participated as an underwriter or dealer in the offering are subject to a 25-day quiet period.	The proposed amendments would apply a 25-day quiet period to managers, comanagers, underwriters and dealers that participate in an IPO.		NASD Rule 2711(f) NYSE Rule 472(f)
Quiet Periods – Secondary Offerings	A 10-day quiet period applies only to the manager and co-manager of a secondary offering.	The proposed amendments would eliminate the quiet periods following a secondary offering.		NASD Rule 2711(f) NYSE Rule 472(f)
Quiet Periods - Expiration, Waiver or Termination of a Lock-up Agreement	Currently, the quiet period surrounding the expiration, termination or waiver of a lock-up agreement is 15 days.	The NASD proposed amendments would eliminate the quiet periods around the expiration, waiver or termination of a lock-up agreement provided that members certify to the NASD that they have a bona fide reason for issuing a research report within 15 days before and after a lock-up expiration.	The NYSE proposed amendments would decrease the quiet period surrounding the expiration, termination or waiver of a lock-up agreement to 5 days.	NASD Rule 2711(f) NYSE Rule 472(f)
Quiet Periods - Exceptions	The current rule contains an exception that permits publication and distribution of research or a public appearance concerning the effects of significant news or a significant event on the subject company during the quiet period.	The NASD did not propose any amendments to this provision.	The NYSE proposed amendments would include earnings announcements within the exception to the quiet period for significant news or events.	NASD Rule 2711(f) NYSE Rule 472(f)
Personal Trading by Research Analysts	The current rules contain exceptions to the trading restrictions applicable to research analysts for certain trades that involve interests in an investment fund over which neither the analyst nor a household member has any investment discretion or control, the research analyst accounts collectively own no more than 1% of the fund’s assets, and the fund invests no more than 20% of its assets in securities of issuers principally engaged in the same types of business as companies that the analyst follows.	Under the NASD proposed amendments, the personal trading restrictions would not apply to investments in any fund (including a registered diversified investment company), so long as neither the analyst nor a member of his or her household is aware of the fund’s holdings or transactions other than through periodic shareholder reports and sales material based on such reports, and provided that the research analyst account owns no more than 1% of the assets of the fund. Therefore, the proposed amendments would eliminate the 20% asset diversification threshold from the exception.	The NYSE did not propose any amendments to the exception.	NASD Rule 2711(g)(5) NYSE Rule 472(e)(4)
Personal Trading by Research Analysts - - Exceptions	The current rules contain certain exceptions to the general prohibition on trading by research analysts.	The proposed rule would revise the exceptions to the personal trading restrictions to create an exemption for members that voluntarily choose to prohibit their analysts from owning shares of the companies they cover. The proposed rule would allow such a firm to adopt policies and procedures that permit research analysts to divest their holdings in an orderly and controlled manner with the oversight of the firm’s legal and compliance personnel.		NASD Rule 2711(g)(5) NYSE Rule 472(e)(4)
Disclosure Requirements	The current rules impose a number of disclosure requirements on member research reports and research analyst public appearances in which the analyst makes a recommendation or offers an opinion concerning an equity security.	The proposed rules would amend the rules to permit members, in lieu of publication in the research report itself, to disclose their conflicts of interest by including a prominent warning on the cover of a research report that such conflicts of interest exist, together with information on how the reader may obtain more detail about these conflicts on the member’s web site. Members would be required to include detailed conflicts information on its web site.		NASD Rule 2711(h) NYSE Rule 472(k)(1)
Definition of Conflict of Interest	Conflict of interest is not currently a defined term.	The proposed rules would define "conflict of interest" to include any of the circumstances that currently require disclosure under NASD Rule 2711(h) and NYSE Rule 472(k)(1).		NASD Rule 2711(h) NYSE Rule 472(k)(1)
Retaliation	The current rules prohibit any member organization and any employee of a member organization who is involved with the member organization’s investment banking activities from directly or indirectly retaliating against a research analyst as a result of an unfavorable research report or public appearance that may adversely affect the member organization’s current or prospective investment banking relationship with a subject company.	The proposed rule change extends the retaliation prohibition to all employees, not just those involved in investment banking activities.		NASD Rule 2711(j) NYSE Rule 472(g)(2)
Definition of Research Analyst Account – New Exclusion	The current rules set forth the trading restrictions and applicable exclusions to research analyst accounts.	The proposed amendments would amend the definition of "research analyst account/research analyst" to clarify that it excludes an investment company registered under the Investment Company Act of 1940 over which the research analyst or household member has no financial interest in such investment company, other than a performance or management fee.		NASD Rule 2711(a)(7) NYSE Rule 472.40
Research Analyst Communication in Presence of Investment Banking and Sales Personnel	A research analyst is currently prohibited from, among other things, engaging in any communication with a current or prospective customer(s) in the presence of investment banking department personnel or company management about an investment banking services transaction.	The proposed amendments would extend the prohibition on research analysts from engaging in communications about an investment banking services transaction with a current or prospective customer in the presence of investment banking department personnel or company management to communications with internal sales personnel.		NASD Rule 2711(c)(5)(B) NYSE Rule 472(b)