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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 the correct principle on a research analyst's dealing in securities that are the subject of their research?

A research analyst must not deal or trade in securities that are the subject of a research report during the 30 days before and 5 days after publication. This restriction prevents front running and conflicts of interest, and it applies to the analyst, not only the principal officer.

  1. AThe analyst may trade freely at any time
  2. BThe analyst must not deal or trade in securities for which a research report is to be published during the 30 days before and 5 days after the publicationCorrect
  3. CThe analyst may trade only after the report is circulated to the clients
  4. DTrading restrictions apply only to the principal officer

Explanation

The regulations restrict the analyst from dealing or trading in the securities covered by a research report during the period of 30 days before and 5 days after publication, to prevent front running. Free trading would be a conflict. The restriction is not confined to the principal officer.

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