Series 79 practice questionmediumResearch Analyst Conflicts
Which of the following is required to ensure research analyst independence under FINRA rules and the Global Settlement?
- AProhibiting investment banking from influencing analyst compensation✓ Correct answer
- BAllowing research analysts to attend deal roadshows
- CPermitting analysts to pre-review research with clients
- DRequiring analysts to report directly to investment banking
Explanation
Why A — Prohibiting investment banking from influencing analyst compensation
Analyst compensation must not be tied to investment banking activities to avoid conflicts. The trap is thinking attendance at roadshows or banking supervision is appropriate, which is prohibited.
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