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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 disclosure is consistent with the SEBI (Research Analysts) Regulations, 2014?

The report must disclose the financial interest of the research analyst and associates, including relatives, in the subject company. This duty does not depend on a 5% threshold or on whether the recommendation is Buy, Hold or Sell, because it aims to reveal conflicts of interest to readers.

  1. AThe analyst may omit disclosure of any shareholding of relatives, since only own holdings matter
  2. BDisclosure is needed only if the analyst holds more than 5% of the company
  3. CDisclosure of financial interest in the subject company, including that of the analyst and associates, must be made in the reportCorrect
  4. DDisclosures are needed only when the report carries a Sell recommendation

Explanation

The Regulations require disclosure of financial interest and beneficial ownership in the subject company, covering the analyst and associates (including relatives). There is no 5% threshold that removes disclosure, and the duty applies regardless of the recommendation type. Hence the other options understate the requirement.

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