Skip to content

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

A research analyst registered under SEBI's Research Analyst Regulations wishes to deal in securities that he covers in his research reports. Which approach is consistent with the regulatory requirements on conflict of interest?

The analyst must disclose holdings and financial interest in the report and must not trade in covered securities contrary to his recommendations within the restricted period set by the regulations. Trading through relatives or relying only on publication timing does not meet the conflict-of-interest requirements.

  1. ATrade freely in the covered securities since he is a registered analyst
  2. BTrade only after disclosing holdings in the report and avoiding trades contrary to his recommendations within the restricted period set out in the regulationsCorrect
  3. CTrade in the covered securities only through a family member to avoid disclosure
  4. DTrade at any time provided the trades are made after publishing the report

Explanation

The regulations require disclosure of financial interest and holdings, and restrict trading in securities covered, including trades contrary to the recommendation within a specified period around the report. Using a family member is an attempt to evade the rules, and merely trading after publication does not satisfy the restrictions.

Did you get it right without looking?

One question tells you little. A timed set on Legal and Regulatory Environment (NISM XV) shows your real accuracy, how long you take and where you lose marks.

Practise Legal and Regulatory Environment (NISM XV)Free diagnostic mock

More Legal and Regulatory Environment (NISM XV) questions