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

Under the SEBI (Research Analysts) Regulations, 2014, which of the following is required of a research analyst when making a public appearance such as a TV interview and discussing a company?

The analyst must disclose financial interest and other conflicts of interest in the subject company during a public appearance. The regulations require such disclosures to be made in reports and appearances so that the audience can judge possible bias; no SEBI pre-approval is needed.

  1. ADisclose the analyst's financial interest and other conflicts in the subject companyCorrect
  2. BDisclose only the target price and avoid any other disclosure
  3. CSeek prior approval from SEBI for every appearance
  4. DDisclose only if the analyst holds more than 10% of the company

Explanation

The regulations require disclosure of conflicts, including financial interest, ownership and compensation relationships with the subject company, in public appearances as well as in research reports. SEBI does not pre-approve appearances, and the disclosure is not limited to a 10% holding or to the target price.

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