Commentary

Joanna Fields
Traders Magazine Online News

Navigating Cybersecurity on a Stretch of "Regulatory Rapids"

In this shared commentary, Aplomb Strategies writes that when considering a firm’s governance structure, a holistic approach makes the most sense.

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April 1, 2003

SIA Rakes NASD And the Big Board

By Gregory Bresiger

Two groups are going too far in trying to clean up the conflicts-of-interest problems in the analyst profession, according to one securities industry trade group.

The Big Board and the National Association of Securities Dealers missed the mark in trying to reform the role of analysts, the Securities Industry Association wrote in a recent letter to the SEC commenting on their proposals. The proposals are "ambiguous, problematic and contain numerous inconsistencies," the SIA wrote.

One of the SRO's reform analyst proposals calls for a certain kind of due diligence for investment banking clients. But that, SIA charges, will mean that compliance is difficult.

"Moreover," the letter continued, "the virtual ban on research supervisors from owning equity securities will discourage most qualified people from wanting to oversee research."

Spokesmen for the Big Board and the NASD declined comment.