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.
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.
