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- ICI Comment Letters
SEC Proposes Regulation Requiring Analysts to Certify Research Reports
Washington, DC, August 22, 2002 - The SEC has proposed Regulation Analyst Certification (Regulation AC) which would require, among other things, that any research report disseminated by broker-dealers include certifications by research analysts that the views expressed in the research report accurately reflect the analysts’ personal views. Research analysts would also be required to report whether they received compensation or other payments in connection with their specific recommendations or views and to provide certifications and disclosures in connection with public appearances.
Regulation AC, part of an initiative to address conflicts of interest affecting research issued by securities firms, is intended to complement other rules governing conflicts of interest, including rules recently adopted by the NYSE and the NASD. Earlier this year, the Institute commented on the rules proposed by the two exchanges, stating that recommendations made by sellside analysts differ substantially from statements made by mutual fund portfolio managers, and supporting the proposal to exclude mutual fund portfolio managers from the rule’s definition of a research analyst. The Institute also noted that many advisory firms already maintain stringent procedures to address potential conflicts relating to the personal management activities of their investment personnel, including portfolio managers.