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NISM Certifications · NISM-Series-XV: Research Analyst · Qualities of a Good Research Report

Which practice by a research analyst best reflects a good research report with respect to disclosure of conflicts of interest?

The best practice is to disclose in the report itself any holdings in the subject company and any compensation or relationship with it. Such disclosure must be written and apply regardless of the rating, so readers can judge possible bias.

  1. ADisclosing holdings in the subject company and any compensation or relationship with it in the reportCorrect
  2. BDisclosing conflicts only if the rating is Sell
  3. CMentioning conflicts verbally to clients
  4. DOmitting holdings below Rs 10 lakh

Explanation

Good reports carry clear written disclosures of financial interest, compensation and relationships with the subject company irrespective of the rating. Verbal or selective disclosure does not meet the standard.

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