Series 79 practice questionhardResearch Analyst Conflicts
Which of the following practices is specifically prohibited to ensure research analyst independence under FINRA rules?
- ALinking analyst compensation directly to specific investment banking transactions✓ Correct answer
- BAllowing analysts to attend client events
- CPermitting analysts to receive feedback from banking prior to report publication
- DHaving analysts present at IPO roadshows only after the quiet period
Explanation
Why A — Linking analyst compensation directly to specific investment banking transactions
Analyst compensation may not be tied to specific banking deals to prevent bias. The trap is assuming general banking involvement is the same as direct compensation linkage.
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