Product Description
The book highlights the major risks that securities analysts (and other securities professionals) face. The various laws, rules and regulations that securities analysts are subject to are broadly split into three categories: research-specific rules and regulations; market-wide laws; and society-wide laws and customs. The risks that arise out of these various levels of rules and regulations, insofar as research analysts and other securities professionals are concerned, include conflicts of interest, fair distribution/front-running of research, insider trading, spreading of rumours, not highlighting investment risks (including corporate governance issues), as well as defamation and copyright issues.
We see that if an analyst puts a company in play, a regulator would instantly assume that the analyst is trading on inside information (especially if the information turns out to be true) or is spreading a rumour (especially if it turns out to be false). However, we also see that there is a third option – that the analyst might just have come to his or her conclusion through some good research based on verifiable facts and reasonable assumptions.
Definitions of research from around the world are examined. After all, research is generally defined by its content, not by the author's job description. As such, non-Research securities professionals such as brokers and marketers of research as well as investors, journalists and even bloggers and twitterers need to understand what constitutes “research” so that they don't fall into the regulators' purview.
As regards the risks to investment views that analysts need to highlight to their investors, the book not only examines economic and financial risks but also examines corporate governance issues such as executive compensation, equal treatment of shareholders, related-party transactions and risk management.
To demonstrate the risks that analysts, securities professionals and investors face, the book draws on many cases and examples from around the world, including many from the global financial crisis of 2007-2009. From these cases we see how penalties for those involved in the securities markets have become more serious over the years. They range from fines to imprisonment, and even to execution in some markets. To give a light-hearted angle, many of these cases are accompanied by “Alex” cartoons.
From the Inside Flap
Financial markets have experienced turmoil in recent years. Whilst new regulations may be introduced around the world, Jeremy Bolland argues in this second edition of his unique guide to writing securities research that securities analysts don't need more regulation?just a clearer understanding of the issues and challenges they face.
Books that help analysts understand securities analysis and valuation abound. Writing Securities Research fills a serious gap by helping analysts appreciate the risks that they run when doing their job, wherever they operate. These include insider trading, frontrunning, conflicts of interest and defamation. Jeremy also comprehensively covers corporate governance risks that analysts need to draw to investors' attention, concerning social responsibility, equal treatment of shareholders, executive compensation, independent non-executive directors and risk management. These topics are explained through actual case studies taken from around the world, accompanied by Alex cartoons to add a light-hearted perspective.
The advice contained in Writing Securities Research does not just help analysts stay out of jail and avoid penalties, it also helps them write better research reports and be more competitive. As Dr. Mark Mobius, Executive Chairman of Templeton Asset Management, says in his foreword, "The book will equip analysts with many useful tools to help them achieve success."
The book is a must-have reference tool for all securities research professionals, including equity and credit research analysts on both the buy and sell sides. Moreover, as Alan Linning, Partner at international law firm Sidley Austin and former Head of Enforcement at Hong Kong's Securities and Futures Commission, attests to, the book should also prove invaluable to other professionals such as lawyers and regulators. Students of investment and finance can't fail to gain a clearer understanding of their subject after reading this well-researched manual.
