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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 statement about trading by a research analyst is correct?

A research analyst must not trade in a company's securities in a manner contrary to the recommendation in their own report, and must not trade ahead of publishing it. Holding securities is allowed with disclosure, so the other statements are incorrect.

  1. AThe analyst must not trade in securities of a company contrary to the recommendation given in the research reportCorrect
  2. BThe analyst may trade freely in the subject company just before publishing a report
  3. CThe analyst may trade in a subject company only if the client is informed after the trade
  4. DThe analyst is barred from owning any listed securities

Explanation

The regulations restrict research analysts from trading contrary to their own recommendations and prohibit front-running of reports. Owning securities is allowed if disclosed, and trading ahead of a report is prohibited, so the other options are wrong.

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