B. Independence and Objectivity.
#analyst-notes #code-of-ethics-and-standards-of-professional-conduct
Procedures for compliance
Members should follow certain
practices and should
encourage their firms to establish certain
procedures to avoid violations of this standard.
- Protect integrity of opinions. Members and their firms should establish policies stating that every research report on issuers by a corporate client reflects the unbiased opinion of the analyst. Firms should also design compensation systems that protect the integrity of the investment decision process by maintaining the independence and objectivity of analysts.
- Create a restricted list. If management at a member's firm dont want to give adverse opinions about a client, they should remove the company from the research universe and put it on a restricted list so that the firm reports only factual information about the company.
- Restrict special cost arrangements. When attending meetings at an issuer's headquarters, a member should pay for transportation and hotel charges. Members should encourage issuers to limit the use of corporate aircraft to situations in which commercial transportation is not available. When frequent meetings are held between an individual issuer and an individual member the issuer is not always the host of the member.
- Limit gifts. Members should limit the acceptance of gifts to token items. The standard does not prohibit ordinary, business-related entertainment if the purpose is not to influence or reward members.
- Review procedures. Members should implement (or encourage their firms to) effective supervisory and review procedures to ensure that analysts and portfolio managers comply with policies relating to their personal investment activities.
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