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NISM Certifications · NISM-Series-XV: Research Analyst · Introduction to Research Analyst Profession

A research analyst, Meera, is preparing a report on a listed company in which her spouse holds shares. Which action is most consistent with good professional conduct and the disclosure requirements?

Meera should disclose the financial interest, including her spouse's holdings, in the research report as required by the regulations and manage the conflict of interest. Omitting it, telling only her employer, or timing a sale before publication does not satisfy the transparency requirement.

  1. AOmit the holding since it is a family member's investment and not her own
  2. BDisclose the financial interest in the subject company, including holdings of her relatives, in the report as required, and manage the conflictCorrect
  3. CPublish the report only if the spouse sells the shares the day before
  4. DDisclose the holding only to her employer and not in the report

Explanation

Regulations require disclosure of financial interest in the subject company, which extends to the analyst and her associates including relatives, in the report. Hiding it or disclosing only internally fails the requirement, and selling just before publication does not remove the need for transparency.

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