Reports on securities listed on bourse: analysts urged to refrain from predicting outcome

Securities and Exchange Commission of Pakistan (SECP) has proposed that the research analysts, preparing reports on securities listed on stock exchange, would refrain from speculating or predicting the outcome of matters pending before the courts. Through SRO No 314(1)/2017 issued here on Thursday, the SECP has proposed amendments in the Research Analyst Regulations, 2015.
According to the proposed amendments, the independent research analyst, research entity and research analyst shall have adequate documentary basis, supported by research, for preparing a research report. The research analyst shall ensure that facts in the research reports are based on reliable information and the source of such information is disclosed.
Further, the research analyst shall refrain from speculating or predicting the outcome of matters pending before the court of law. In case a research entity obtains content of a research report from a third party and publishes it under the research entity's name, such third party shall be treated as a research analyst for the purposes of these Regulations and shall be responsible for compliance with these Regulations and shall make all necessary disclosures of any material conflict of interest in such research report. Such research entity shall also provide disclosures required under these Regulations in the research report.
Independent research analyst, research entity and such research analyst, who sell their research to research entities but is not employed with them, shall inform the Commission before commencement of its business for the purposes of record. It said the public appearance means any participation in a conference call, seminar, forum (including interactive and non-interactive electronic forum and electronic communication), radio or television or internet or web or print media broadcast, authoring a print media article or other public speaking activity in which a research analyst, or an officer, director, or employee of a research entity or independent research analyst, makes a recommendation or offers an opinion, concerning listed securities or a public offer.
Research analyst means a person, by whatever name called, who is involved in the preparation, writing and/or publication of a research report or the substance of a research report concerning securities that are listed or to be listed on a stock exchange registered in Pakistan and includes such persons or firms who prepare research reports and sell them to a research entity for publication under the research entity's name, it said.
Research entity means a company which provides services of issuance of a research report in its own name through the research analysts employed by it or through third party research analysts not employed by it and which is also engaged in providing certain services for the securities market, the regulations added.