On Friday, the SEC announced that it had consented to the termination of undertakings in the early-2000s Global Research Analyst Settlement. The modifications are subject to court approval. The SEC’s announcement notes:

The final judgments contained an Addendum with undertakings that addressed potential conflicts of interest between equity research analysts and investment banking personnel. The Addendum also included a sunset provision for newly adopted rules that would supersede the undertakings, and stated that for terms that were not superseded, the SEC would agree to an amendment or modification, subject to court approval, unless the SEC believed the amendment or modification would not be in the public interest. The Addendum was modified by court order in March 2010 to remove or modify certain provisions. The revised Addendum also stated that the SEC would agree to further amendment or modification of the undertakings, subject to court approval, unless the SEC believed the amendment or modification would not be in the public interest.

In 2015, FINRA adopted and implemented, and the SEC approved, Rule 2241 (Research Analysts and Research Reports), which addresses conflicts of interest between research analysts and investment banking personnel within registered broker-dealers.

The settling firms filed motions in June and December 2025 seeking to terminate the remaining undertakings in the Addendum based in part on the adoption and implementation of FINRA Rule 2241. In its responses to the motions, the SEC acknowledges the sunset provision in Addendum A of the final judgments and the passage of FINRA Rule 2241, states that it “believes modification of the Judgment is in the public interest,” and consents to the requested modification of the final judgments.

Commissioner Mark Uyeda noted in a statement:

It’s not a coincidence that since 2004, there has been a lot less research out of Wall Street, particularly for small and medium-sized companies. The result has been a chilling effect on research coverage in precisely the segments—emerging growth and smaller public companies—where investors most need high quality analysis. In 2017, the U.S. Department of the Treasury recommended that the SEC conduct a holistic review of the Global Research Settlement and the research analyst rules to determine which provisions should be retained, amended, or removed, with the objective of harmonizing a single set of rules for all financial institutions.

Today, the Commission moved toward more thoughtfully regulating some of the most important providers of sell-side equity research. It seems hard to argue that the requirements of the Global Research Settlement still hold their relevance. FINRA Rule 2241 now provides a robust framework for managing research analyst conflicts, disclosures, and supervision, but does so through a principles-based SRO rule that can be updated through notice-and-comment and interpreted consistently across member firms. These are not weaker protections; rather, they are conflict mitigation tools that are targeted, transparent, and aligned with how research is actually produced, paid for, and consumed. The Commission’s action will lower compliance friction, promote more consistent interpretations, and, ultimately, expand the availability of research coverage that helps investors make better decisions.

In short, this is the kind of good government reform that will better serve investors, issuers, and the integrity of our U.S. capital markets.

If you are an old-timer like me, you will recall that the Global Research Analyst Settlement was a momentous event that addressed research analyst conflicts of interest and other concerns that emerged from the late 1990s dot.com boom (and bust), radically changing the way that research is done on Wall Street.

– Dave Lynn