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NISM Certifications · NISM-Series-XV: Research Analyst · Legal and Regulatory Environment (NISM XV)

A registered research analyst is about to publish a report on a listed company. Which of the following disclosures is required to be made in the research report under the regulations?

The report must disclose whether the analyst or associates hold financial interest or beneficial ownership of 1% or more in the subject company. This is a conflict-of-interest disclosure required by the research analyst regulations, so readers can judge objectivity. Tax returns, client lists and brokerage totals are not required.

  1. AThe analyst's personal income tax returns for the last three years
  2. BWhether the analyst or associates hold financial interest or 1% or more beneficial ownership in the subject companyCorrect
  3. CThe names of all other clients who received the same report
  4. DThe brokerage earned by the analyst's employer from all clients in the previous year

Explanation

The regulations require disclosure of conflicts of interest, including financial interest and beneficial ownership of 1% or more in the subject company held by the analyst, associates or relatives. The other items are not mandated disclosures in a research report.

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