WASHINGTON - The Securities Industry Association on Wednesday urged the National Association of Securities Dealers to revise its proposal that would require more public disclosures from equity analysts.

Last month the NASD proposed an amendment to current rules that would require a member firm's recommendation to buy a particular security be accompanied by disclosures of any interest the analyst has in the company that issued it, and any interest over a 5% ownership stake that the firm has in the security. It would also require disclosure of any compensation the firm receives from the issuing firm for investment banking services.

Similar disclosures would have to be made in all public appearances, which the NASD defined as "radio or television interviews, seminars, and interactive electronic forums."

In a 27-page letter to the NASD, Joseph Polizzotto, the chairman of the SIA's federal regulation committee and Michael H. Stone, the president of the compliance and legal division, wrote that SIA "has concerns that overregulation in this area may have significant unintended consequences."

"We believe that the existing rule should not be revised in ways that could either undermine its purpose of conveying meaningful information to investors, conflict with the SEC mandatory disclosure regime, or increase the potential for conflicts of interest affecting research reports."

They made numerous suggestions, including some that would increase disclosure requirements and others that would bring the NASD proposal in line with existing Securities and Exchange Commission disclosure rules.

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