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

A research analyst registered with SEBI is about to publish a report on a listed company. Which of the following is a required disclosure in the research report under the Research Analyst Regulations?

The report must disclose whether the analyst or associates have financial interest or beneficial ownership of 1% or more in the subject company. This conflict-of-interest disclosure helps readers judge bias. Personal bank balances, client lists and tax returns are not required report disclosures.

  1. AThe analyst's personal bank balance
  2. BWhether the analyst or associates hold financial interest or actual/beneficial ownership of 1% or more in the subject companyCorrect
  3. CThe names of all clients who have subscribed to the research service
  4. DThe analyst's income tax returns for the last three years

Explanation

The regulations require disclosure of conflicts of interest, including financial interest and beneficial ownership of 1% or more in the subject company by the analyst or associates. Client lists, bank balances and tax returns are not required disclosures in a report. The aim is to let readers judge possible bias.

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