The Bangladesh Securities and Exchange Commission is likely to finalise today the Research Analysis Rules, which will allow firms to provide their clients with written analysis report on specific stocks.
The commission discussed the draft Research Analysis Rules on Tuesday but could not find enough time to finalise it, a BSEC source told New Age.‘We hope that the commission will be able to make the rules final on Wednesday,’ he said.
The Commission on March 7, 2012 finalised the draft rules in a bid to develop a rumour-free stock market and to help investors reduce risks.
The draft said that merchant banks, stockbrokers, stock dealers, asset management companies and independent research firms would be eligible to publish research reports on listed securities.
The institutions must have a separate research team comprising at least three members, including a head of research, it said.
The draft also said that any person seeking to become a research analyst must have relevant academic or professional qualification with at least three years of experience in the stock market, while the head of research team must have five years of experience.
The research staff must exercise diligence, independence and thoroughness in analysing securities and making investment recommendations. They must have reasonable and adequate basis supported by appropriate research and investigation, for any investment analysis, recommendation or action, it said.
The draft said that the advisory service should be research based and the service provider must have a research wing which would be formed according to the research analysis rule.
It also said that the analysts had to ensure that they did not hold any position in a stock at the time of publishing the analysis report.
The research analysts would not be able to participate with merchant bankers and investment bankers in generating investment banking business, the draft said.
-With New Age input
