Industry Update for Broker-Dealers
SEC Eases Long-Standing Global Research Settlement Restrictions
The Securities and Exchange Commission SEC has formally agreed to ease the long-standing restrictions imposed under the early-2000s Global Research Analyst Settlement, opting instead to rely on FINRA’s modern research-analyst rules and existing securities-law requirements. This represents a significant regulatory shift that the industry has anticipated for decades.
For those who implemented and enforced the Global Research Settlement firsthand, this moment feels especially significant. The experience is still clear in our minds. Firms spent millions on remediation, legal and compliance teams invested countless hours, policies and procedures were rewritten repeatedly, training cycles were extensive, and tracking disclosures, certifications, and attestations became a constant effort, all while navigating a settlement that was never intended to serve as a long-term framework.
Looking back more than twenty years, we can appreciate how challenging it was simply to determine what needed to happen next. It was a demanding and intense period, and it shaped an entire generation of compliance practitioners.
What Will Change
- The settlement-imposed “firewall” requirements that separated research from banking will be relaxed.
- The SEC has determined that FINRA Rules 2241 and 2242, combined with existing securities-law obligations, provide an appropriately robust framework for managing research conflicts of interest.
- Regulators acknowledged that the older settlement model may have contributed to declining research coverage, particularly for small and mid-cap issuers.
What Doesn’t Change
Even with this welcome regulatory modernization, firms remain responsible for:
- Maintaining strong conflict-management policies and disclosures
- Ensuring research independence and transparency
- Supervising personal and proprietary trading when covered securities are involved
- Demonstrating consistent, documented oversight across research, banking, sales, and trading functions
The structure may be changing, but the obligation to manage conflicts and material nonpublic information (MNPI) risk remains as important as ever.
How StarCompliance Can Help You Navigate This Transition
As firms adjust to the post-settlement research environment, many are revisiting how they capture, monitor, and govern potential conflicts of interest. Star’s Compliance Control Room (CCR) is built for exactly this kind of interconnected oversight:
- Holistic conflict monitoring across research, investment banking, sales & trading, and employee activity
- Integrated watch/restricted-list management with automated updates and trading controls
- Comprehensive documentation connecting with research publication tools and wall-crossing workflows
- Real-time visibility into who has access to what information, and whether any exposure may create conflicts or restrictions
CCR helps firms preserve research integrity, protect analysts, and uphold their obligations while allowing the business to operate with greater confidence under the new rules.
Looking Ahead
This regulatory update is more than a rule change; it’s a moment of transition for the industry. After two decades of navigating settlement-imposed structures, firms now have an opportunity to modernize their research-conflict framework in a way that is risk-aligned, scalable, and operationally practical.
Star stands ready to support you as you reassess your internal processes, strengthen oversight, and build a compliance program that reflects both the new regulatory freedom and the enduring expectations of independence and integrity.
To learn more about how Star’s CCR can support your research-compliance program and to book a demo, click [HERE].
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