3.2.5.3 Research Analyst Restrictions
No research analyst may participate in the solicitation of investment banking business. Nor may a research analyst communicate with a customer or prospective customer about an investment banking transaction in the presence of the firm’s management or investment banking department personnel. Similarly, investment banking personnel are forbidden from directing a research analyst either to participate in soliciting investment banking business or to communicate with a customer or prospective customer about an investment banking transaction.
FINRA also prohibits a broker-dealer from paying a research analyst any salary or bonus based on a specific investment services banking transaction. The compensation of a research analyst responsible for the substance of a research report must be reviewed and approved at least annually by a committee reporting to the board of directors. No committee representative may be from the investment banking department.
Research analysts who work for a company that participated in an IPO (as either an underwriter or a dealer) may not make public appearances or release research reports on t