Alerts

New Fairness Opinion Rule Approved by the SEC

November 8, 2007

The Securities and Exchange Commission on Oct. 11 approved proposed Rule 2290 of the Financial Industry Regulatory Authority Inc. ("FINRA") relating to fairness opinions. The new rule requires FINRA members to maintain written procedures with respect to the approval of fairness opinions and to include certain disclosures in fairness opinions. In many respects, Rule 2290, which will take effect 30 days after FINRA publishes a Notice to Members, codifies what is already common practice for fairness opinions. However, to comply with the new rule, most FINRA members will need to revise their internal procedures and modify their fairness opinion forms.