Writing Securities Research: A Best Practice Guide

作者简介

Preface.

Summary points and recommendations.

Background.

Background to the second edition.

Background to the first edition.

The changing regulatory environment.

Introduction.

More education rather than more regulation.

The need to identify investment risk.

Target readership.

Commercial benefits to compliance.

Local differences and specific circumstances.

Summary.

Case studies and examples.

Themes.

Research coverage.

Sourcing information.

Reasonable basis for recommendations and risk assessment.

Conflicts of interest.

Writing in general.

Acknowledgments.

Abbreviations Used in This Book.

Chapter 1: Principles of Research.

Key points.

Definition and supervision of research.

Supervision and control of research.

Marketing research to the U.S. by foreign broker-dealers.

Stock-picking tips.

Continuing education.

Cheating in tests.

The realm of research.

Ambit of securities regulations (bonds).

Ambit of securities research regulations (equity and credit research analysts).

Ambit of securities regulations (swaps and other derivatives).

Ambit of securities research regulations (marketers of research, including hedge fund research).

Ambit of securities research regulations (analysts as experts on sales desks).

Ambit of securities research regulations (stock-tipping bloggers).

Ambit of securities research regulations (media commentators).

Minimizing approval and publishing risks.

Honesty and fair treatment of clients.

Common securities-related violations cited by the SEC and FINRA of the U.S.

Regulations tightening up around the world (Hong Kong).

Regulations tightening up around the world (China).

Regulations tightening up around the world (Japan).

Front-running and selective distribution of research.

Front-running and selective distribution of research (huddles).

Front-running of research.

Selective distribution of research.

Selective distribution of research (fact-checking).

Selective distribution of research (greater conviction of view).

Insider dealing and selective disclosure.

Use/dissemination of price-sensitive information (general).

Use/dissemination of price-sensitive information (U.S.)

Use/dissemination of price-sensitive information (U.K.)

Use/dissemination of price-sensitive information (Hong Kong).

Use/dissemination of price-sensitive information (serial insider trading).

Use/dissemination of price-sensitive information (pillow talk).

Use/dissemination of price-sensitive information (economists).

Specific requests and proprietary information.

Definition of publishing.

Unfair portrayal of past recommendations.

Performance of past recommendations.

Conflicts of interest and disclosure of interests.

Catering to investors with specific investment criteria.

Shari'ah law implications for securities research analysts (stocks).

Shari'ah law implications for securities research analysts (bonds).

The virtues of a vice portfolio.

Analyst surveys.

Playing the voting "game".

Sourcing information.

Acknowledging the source.

Gathering confidential information.

Receiving confidential information.

Rumors, speculation and M&A.

Identifying M&A candidates (putting companies into play).

Short selling by hedge funds (abusive rumor-mongering).

Defamation—libel and slander.

Defamation.

Intellectual property—copyright and plagiarism.

Intellectual property.

Research integrity and consistency.

The problem.

Disgruntled clients.

The principles.

…be consistent or explain apparent inconsistencies.

Sector/country weightings and universes.

Consistency of views.

Top picks (research requirements).

Consistency of views.

Technical analysis.

Useful qualifications (technical analysis).

Coverage universe—initiations, terminations and transfers.

Accountability principles.

Initiation of coverage.

Transfer or re-initiation of coverage.

Co-authorship liability.

Termination of coverage.

"Under review".

Publishing new research.

No recommendation?

No recommendations.

Chapter 2: Reasonable Basis, Valuations and Risk.

Key points.

Consistency of recommendations.

Explanation for inconsistencies.

Following the market.

Valuation support.

Forensic analysis of accounts.

Channel-stuffing and other activities.

Cross-industry antitrust issues.

Disclosures and notes.

Pro-forma accounting and use of selective data.

Reasonableness of valuations.

Highlight valuation changes.

The appropriate valuation methodology.

Unrealistic expectations or questionable bases for valuation.

Excessive valuations.

Highlighting risks and volatility.

Appropriateness of sell ratings.

Short-selling by hedge funds (pushing the envelope?)

Management’s reaction to negative research (legal action).

Management’s reaction to negative research (restricting information).

Mis-selling and not highlighting risks.

Highlighting investment risks (credit crisis of 2007/08, U.S.)

Highlighting investment risks (credit crisis of 2007/08, global).

Highlighting investment risks (general).

Evaluating risks and catalysts.

Catalysts and consensus.

Market liquidity and contagion risks.

Foreign exchange and interest rate risks.

Currency risks.

Earnings risks.

Brand theft risk.

Brand theft.

Brand usurping.

Cashflow and liquidity risks.

Valuation risks.

Modeling and miscalculation risks.

Modeling risks.

Mispricing risks.

Information risk.

M&A risks.

Corporate governance risks.

Gauging corporate governance risks.

Social responsibility.

Corporate governance (social responsibility—rankings).

Durability of brand names.

Corporate governance (social responsibility—the mass-consumer market).

Corporate governance (social responsibility—corporate governance excellence).

Executive remuneration.

Corporate governance (executive remuneration).

Corporate governance (executive remuneration—disclosures).

Executive insider trading.

Corporate governance (executive insider trading).

Equal treatment of shareholders.

Corporate governance (equal treatment of shareholders).

Corporate governance (related-party transactions).

Corporate governance (equal treatment of shareholders—related-party transactions).

Corporate governance (vote manipulation).

Corporate governance (independent non-executive directors).

National interest.

Corporate governance (national interest).

Corporate governance (national interest—strategic industries).

Corporate governance (national interest—sovereign wealth funds).

Risk management.

Corporate governance (false statements by issuers).

Corporate governance (risk management and rogue traders).

Corporate governance (transparency of operations).

Ponzi schemes.

Corporate governance (risk management and money-laundering, bribery and corruption).

Credit rating risks.

Analyzing risk (credit rating agencies).

Due diligence by investment bankers.

Due diligence (failures).

Chapter 3: Independence of Research and Conflicts of Interest.

Key points.

Summary.

Separating research and banking.

Conflicts of interest (global settlements).

Conflicts of interest (collateralized debt obligations).

Conflicts of interest (auction-rate securities).

Managing contacts between analysts and bankers.

Disclosures of interests and relationships.

Conflicts of interest (private trading contrary to recommendations).

Analyst certification.

Conflicts of interest (disclosures).

Writing research on banking clients.

Conflicts of interest (watch lists).

Conflicts of interest (managing apparent conflicts).

"Pre-deal" research.

Conflicts of interest (pre-deal research).

Influencing of analysts by issuers.

Conflicts of interest (bribes).

Conflicts of interest (favors).

Conflicts of interest (issuers guiding analysts).

Conflicts of interest (employment).

Independent research firms.

Alleged conflicts of interest (independent research firms).

Paying for sell-side research.

Transparency in paying for research (inappropriate payments).

Paying for credit ratings.

Chapter 4: Non-research: E-mails, Blogs and Internal Communications.

Key points.

Approval of e-mail and media appearances.

Objective commentary on non-rated companies.

E-mails.

E-mails as research.

Retention of e-mails.

"Internal Use Only".

Chapter 5: General Writing, Editing and Publishing Considerations.

Key points.

Introduction.

Getting the message across.

Headlines and covers.

Standards of taste.

Bullets, key points and executive summaries.

Publishing and distribution.

Writing the text.

Writing rules.

Use the right word.

Vocabulary for attributin...