The NYSE and the National Association of Securities Dealers (which operates the Nasdaq) have sent to the SEC a proposed regulation that would require analysts from member firms to disclose any potential conflict of interest of the kind that has tainted the reputation of the securities industry over the past 12 months. So far, so good.But the proposal also suggests that if a media outlet consistently refuses to include information about conflicts in its reports (the NYSE and NASD would maintain a blacklist of sorts), analysts would be forbidden from speaking with that publication. Analysts who provide comments to non-approved media could be fined or even suspended. That provision has free-speech advocates up in arms. Says Jane Kirtley, professor of media ethics and law at the University of Minnesota, "The appetite of regulatory agencies to control speech is insatiable, and if they can do so under the guise of protecting the public, so much the better. It's sinister." The LA Times' Tim Rutten calls it "an attempt to launder a constitutionally impermissible prior restraint of speech by calling it a securities regulation." I describe myself as a First Amendment fundamentalist, so my first reaction to this proposal mirrored those of Kirtley and Rutten. But it is only the involvement of the SEC that raises First Amendment concerns, since the First Amendment specifically forbids government efforts to regulate speech. If the NYSE and NASD - both private institutions - chose to enforce this rule on their members, there would be no First Amendment issue, although serious questions about whether it's appropriate for them to blacklist specific media would remain. Both the NYSE and NASD have legitimate concerns about the credibility of their members, and of the financial markets as a whole. And the way in which their members communicate via the media clearly impacts their credibility. It's encouraging to see these organizations recognize that the point of media relations is credibility, and that credibility is enhanced by transparency. Obviously, the media is under no obligation to help the securities industry rebuild its reputation, and securities dealers are under no obligation to lend cooperation (and implied endorsement) to those media that through their irresponsibility are contributing to the industry's credibility problem. Ultimately, I'd like to see the desire for disclosure enshrined in a voluntary code of ethics, or even taken up on a firm-by-firm basis. I'd also like to see journalists' professional organizations - which must recognize the role their members have played in misleading the public - incorporate guidance on conflict-of-interest disclosure into their own codes of conduct.