CFA Level I · CFA Level I Exam · Guidance for Standard VI: Conflicts of Interest
A sell-side analyst is asked by her firm's marketing division to publish a favorable report on a company that the firm hopes to win as an investment banking client. The analyst most likely:
The analyst should resolve the conflict or disclose it under Standard VI(A). A marketing request to support a recommendation in order to win business from the company is a cross-departmental conflict. Report length is irrelevant, and such requests are not exempt from the standard.
- Amay comply if the report is shorter than usual.
- Bshould resolve the conflict or disclose it under Standard VI(A).Correct
- Cmay issue the report because marketing requests are not conflicts.
Explanation
The guidance on cross-departmental conflicts says a marketing division may ask an analyst to recommend a stock to obtain business from the company. Members must resolve such situations or disclose them. Report length is irrelevant, and marketing requests can be conflicts.
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