Securities and Exchange Commission.
Notice of OMB approval of collections of information.
The Securities and Exchange Commission (“Commission”) adopted new Regulation Analyst Certification (“Regulation AC”) (17 CFR 242.500 through 242.505) under the Securities Exchange Act (17 U.S.C. 78,
April 14, 2003.
James Brigagliano, Thomas Eidt, or Racquel Russell, at (202) 942–0772 in the Office of Risk Management and Control in the Division of Market Regulation, Securities and Exchange Commission, 450 5th Street, NW., Washington, DC 20549–0506.
Regulation Analyst Certification requires that broker-dealers and covered persons include in their research reports:
• A statement by the research analyst certifying that the views expressed in the research report accurately reflect such research analyst's personal views about the subject securities or issuers; and
• A statement by the research analyst certifying that no part of his or her compensation was, is, or will be directly or indirectly related to the specific recommendation or views contained in the research report; or
• A statement by the research analyst certifying that part or all of his or her compensation was, is, or will be directly or indirectly related to the specific recommendation or views contained in the research report. If the analyst did receive such related compensation, the statement must include the source and amount of such compensation, and the purpose of the compensation, and further disclose that such compensation may influence the recommendation in the research report.
Additionally, under Regulation AC, broker-dealers must make a record related to public appearances by research analysts. Specifically, a broker-dealer who publishes, circulates, or provides a research report prepared by a research analyst it or a covered person employs, would be required to make a record within thirty days after each calendar quarter in which the research analyst made the public appearance, that includes:
• A written statement by the research analyst certifying that the views expressed in each public appearance accurately reflected such research analyst's personal views about the subject securities or issuers; and
• A written statement by the research analyst certifying that no part of such research analyst's compensation was, is, or will be directly or indirectly related to any specific recommendations or views expressed in any public appearance.
In cases where the broker or dealer does not obtain a statement by the research analyst in connection with public appearances as described above, the broker-dealer must promptly notify its examining authority, designated
Certain provisions of Regulation AC contain “collection of information” requirements within the meaning of the Paperwork Reduction Act of 1995.
The purpose of requiring that research analysts certify that the views expressed in research reports and public appearances reflect their personal views, and requiring disclosure of information regarding whether analyst compensation is related to those specific recommendations or views, is to help bolster investor confidence in the quality of research. This, in turn, should help bolster investor confidence in the securities markets. The Commission estimates that the annual paperwork burden in hours is 11,296 for a cost in dollars of approximately $1,372,464.
On March 5, 2003, OMB approved the collections of information contained in Regulation AC. Regulation AC (OMB Control No. 3235–0575) was adopted pursuant to the Securities Exchange Act of 1934 (17 U.S.C. 78,