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Writing Securities Research: A Best Practice Guide, 2nd Edition


Writing Securities Research is a comprehensive guide for securities research analysts around the world. Analysts who want to write research that is clear, concise and actionable should carefully read and digest the contents of this book. I would say that it should also be compulsory reading for research managers,compliance officers, editors, securities lawyers, securities regulators and students of investment and finance. Jeremy Bolland's book helps to equip analysts with many useful tools to help them achieve securities research success.
Dr. Mark Mobius
Executive Chairman of Templeton Asset Management Ltd.

Jeremy has made a major contribution by incorporating and explaining ethical principles in the writing and dissemination of investment research. He uses real-life examples as illustration which enhances the reader's understanding. This is a practical book for analysts, academics, regulators and students of finance.
Lee Kha Hoon
Asia Pacific Head of Standards and Financial Market Integrity, CFA Institute

For every research analyst, research manager, research counsel and supervisory analyst, a large proportion of his or her role involves the circumnavigation of a dense body of global, often conflicting, regulation. In training sessions, many analysts ask: "But how does this apply to me? Why do the US rules apply if I'm based in Hong Kong? How do I recognize price-sensitive information?" Jeremy has done what no one thought of doing before: he has pulled together the rules and the examples where firms and individuals fell foul of those rules, distilled into a best-practice guide that can be used by the green and the seasoned in any jurisdiction.
Emma Pegler
Global Head of Research Control, HSBC

At a time when the regulatory landscape in the financial world is becoming increasingly complex, it is refreshing to read Jeremy's book which identifies clearly and concisely the difficult regulatory, legal and ethical issues that research analysts must navigate around the world when producing research for their clients. It is the comprehensive nature of Jeremy's book and the fact that he provides practical solutions to problems that make it such a useful tool for analysts, institutions, regulators and professional advisers alike.
Alan Linning
Partner, Sidley Austin, and Former Head of Enforcement, Hong Kong Securities and Futures Commission

Recent market events have heralded a new era of scrutiny, with consequences for the world within which securities analysts operate. At the same time, the regulatory environment has become increasingly sophisticated with complex, often competing, global requirements. Jeremy provides comprehensive guidance through all aspects of preparing securities research. The practical, focused case studies will also give real value to anyone who wants to fully appreciate the potential pitfalls that can and do arise. Whether you're a lawyer or a regulator just starting out in this field, or you have been in it for many years, Jeremy's research and guidance will offer you real insight.
Elizabeth Clay
Solicitor, White & Case LLP

Securities research in developing markets, especially those in Asia, requires a practical hands-on approach. In markets where transparency is not a given, Jeremy gives analysts the intellectual framework necessary for making sound, honest judgments about any company. These aren't the lessons they teach you in MBA programs. They're the real deal!
Steve Vickers
President and CEO of FTI-International Risk

Since writing the first edition of Writing Securities Research: A Best Practice Guide, Jeremy Bolland has been invited regularly to address CFA societies on the risks that their members face as chartered financial analysts. He has also addressed audiences of regulators, lawyers, and law students on the subject.
Jeremy has over 25 years of experience in the world of investments, and has worked in London, Tokyo, and Hong Kong. For the past 16 years he has worked in securities research at global investment banks, including a five-year stint at Morgan Stanley, five years as a director at ING/ING Barings, and most recently five years at HSBC where his final role was Head of Training for Global Research. Jeremy has been a qualified supervisory analyst (SA) since 1997, and as such is authorized to approve securities research for U.S. distribution.
Before entering the securities industry, Jeremy was marketing director and company secretary for a property development company that undertook industrial and commercial projects throughout the U.K. as tax-shelter investments for corporates and high net worth individuals.
Jeremy is also the author of A Guide to Investment in Enterprise Zones (Longman, 1988, 2nd ed. 1990).
Jeremy Bolland grew up in Malaysia, holds an honors degree in Classics from King's College, London University, and studied Chinese at SOAS and Beijing Normal University.


Summary points and recommendations.


Background to the second edition.

Background to the first edition.

The changing regulatory environment.


More education rather than more regulation.

The need to identify investment risk.

Target readership.

Commercial benefits to compliance.

Local differences and specific circumstances.


Case studies and examples.


Research coverage.

Sourcing information.

Reasonable basis for recommendations and risk assessment.

Conflicts of interest.

Writing in general.


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.


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.


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 as research.

Retention of e-mails.

"Internal Use Only".

Chapter 5: General Writing, Editing and Publishing Considerations.

Key points.


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 attributing forward-looking comments (using "will").

Measurements and direction/degree of movement.

Vocabulary for describing movement and performance.

Words to avoid or use carefully.

Bullshit Bingo (vocabulary and phrases).

Clarity of communication.

Clarity, consistency, conformity and continuity.

Be consistent or explain inconsistencies.

Editorial departments and style guides.

Translations into different languages.


Publishing independent yet integrated reports.

Sensitivity to politics and religion.

Sensitivity to politics and religion.

Correcting errors.

Courses of corrective action.

Materiality of the error.

Publishing of out-of-date story.


Helping the reader.