COBS 6.4.2 Disclosures in Investment Research
Past version: effective from 21/10/2015 - 20/10/2015
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(a) When an Authorised Person publishes Investment Research, it must take reasonable steps to ensure that the Investment Research:
(i) clearly identifies the types of Clients for whom it is principally intended;
(ii) distinguishes fact from opinion or estimates, and includes references to sources of data and any assumptions used;
(iii) specifies the date when it was first published;
(iv) specifies the period the ratings or recommendations are intended to cover;
(v) contains a clear and unambiguous explanation of the rating or recommendation system used;
(vi) includes a distribution of the different ratings or recommendations, in percentage terms:
(A) for all Investments;
(B) for Investments in each sector covered; and
(C) for Investments, if any, where the Authorised Person has undertaken Corporate Finance Business with or for the Issuer over the past twelve months; and
(vii) if intended for use only by a Professional Client or Market Counterparty, contains a clear warning that it should not be relied upon by or distributed to Retail Clients.
(b) An Authorised Person must consider whether it would be appropriate to include a price chart or line graph depicting the performance of the Investment for the period that the Authorised Person has assigned a rating or recommendation for that investment, including any dates on which the ratings were revised.
(c) For the purposes of this section, an Authorised Person must take reasonable steps to ensure that when it publishes Investment Research, and in the case where a representative of the Authorised Person makes a public appearance, disclosure is made of the following matters:
(i) any financial interest or material interest that the Investment Analyst or a Close Relative of the analyst has, which relates to the Investment;
(ii) the reporting lines for Investment Analysts and their remuneration arrangements where such matters give rise to any conflicts of interest which may reasonably be likely to impair the impartiality of the Investment Research;
(iii) any shareholding by the Authorised Person or its Associate of 1% or more of the total issued share capital of the Issuer;
(iv) if the Authorised Person or its Associate acts as corporate broker for the Issuer;
(v) any material shareholding by the Issuer in the Authorised Person;
(vi) any Corporate Finance Business undertaken by the Authorised Person with or for the Issuer over the past twelve months, and any future relevant Corporate Finance Business initiatives; and
(vii) that the Authorised Person is a Market Maker in the Investment, if that is the case.