Series 79 practice questionmediumResearch Analyst Conflicts
Which of the following is required to ensure research analyst independence under FINRA rules?
- APhysical and functional separation between investment banking and research departments✓ Correct answer
- BResearch analyst compensation solely determined by investment banking revenue
- CUnrestricted communication between analysts and banking staff during offerings
- DAllowing analysts to attend investment banking pitch meetings without disclosure
Explanation
Why A — Physical and functional separation between investment banking and research departments
Independence is required by physically and organizationally separating research from investment banking. The other options would compromise analyst objectivity and violate FINRA rules.
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