INMA 9B.1.1 Investment research — conflicts of interest and impartiality

(1) This rule applies if:
(a) an INMA firm publishes or disseminates investment research; and
(b) either:
(i) the firm holds the research out (in whatever terms) as being an impartial assessment of the value or prospects of the subject matter of the research; or
(ii) it is reasonable for those to whom the firm has published or distributed the research to rely on it as an impartial assessment of the value or prospects of the subject matter of the research.
(2) The INMA firm must do all of the following:
(a) establish and implement a policy, appropriate to the firm, for managing effectively the conflicts of interest and material interests that might affect the impartiality of the investment research;
(b) make a record of the policy and keep it for at least 6 years after the policy ceases to have effect;
(c) take reasonable steps to ensure that the firm and its employees comply with the policy;
(d) make a written copy of the policy available to any person on request;
(e) take reasonable steps to ensure that the policy remains appropriate and effective.
(3) The policy must identify the types of investment research to which the policy applies and must make provision for systems, controls and procedures that:
(a) identify conflicts of interest and material interests that might affect the impartiality of the investment research to which the policy applies;
(b) manage effectively conflicts of interest and material interests, to the extent that they arise or might arise within the INMA firm, in relation to each of the following:
(i) the supervision and management of investment analysts;
(ii) the remuneration structure for investment analysts;
(iii) the extent to which investment analysts may become involved in activities other than the preparation of investment research;
(iv) the extent to which inducements offered by issuers of securities, or other persons with material interests in the subject matter of investment research, may be accepted by investment analysts or senior employees of the INMA firm;
(v) the persons who may comment on draft investment research before publication, and the procedure for taking account of their comments;
(vi) the timing and manner of publication and distribution of investment research and of the communication of its substance;
(vii) what information or disclosures are appropriate to include in investment research (taking appropriate account of matters required by law); and
Guidance
The matters enumerated in paragraph (b) are not exhaustive and the policy should allow the firm to manage conflicts of interest that arise or might arise in relation to other matters.
(c) clearly indicate the extent to which the firm's policy relies on Chinese walls or other information barriers.
Inserted by QFCRA RM/2019-4 (as from 1st January 2020).