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SICAS Issues Final Report - 33 Recommendations Dealing With Everything From Conflicts Of Interest To Improved Governance Practices - Committee Sponsored By The Investment Dealers Association Of Canada, The Toronto Stock Exchange Inc. And The Canadian Vent

Date 14/11/2001

Today in Toronto, the Securities Industry Committee on Analyst Standards (SICAS) issued its final report entitled Setting Analyst Standards. In this report, the committee tabled 33 recommendations.

The key recommendations call for mandatory disclosure of conflicts of interests for the brokerage firms and analysts, prohibition of certain relationships for analysts producing research and registration of supervisory analysts.

Committee Chairman Purdy Crawford said, "It is no secret that open disclosure enhances the credibility of a public company in the minds of shareholders. These same principles must be applied to analysts who provide research and advice on Canadian corporations. Therefore industry leaders at both investment-dealer firms and public companies must 'walk the talk' and encourage analyst independence and prove they are serious about independent research."

The recommendations include:

  • 7 recommendations that focus on better disclosure of conflicts of interest;
  • 12 recommendations that focus on improving research reports by outlining best practices for the reports and the issuance of these reports by analysts and their firms;
  • 6 recommendations that focus on the registration of supervisory analysts and the oversight of all analysts in the marketplace;
  • 7 recommendations that focus on the importance of good governance; and
  • 1 recommendation that encourages the industry to work together to help investors understand the role of the analyst in the marketplace.
"We expect regulators, exchanges and industry participants will act expeditiously to implement these recommendations," added Mr. Crawford. "Our committee will be monitoring progress and will go as far as releasing a report card in a year's time."
  • 18 recommendations are directed at the IDA, including 6 recommendations that also involve the Stock Exchanges and 2 that involve the Association for Investment Management and Research.
  • 12 recommendations are directed at the Industry and will involve implementation by the IDA.
  • 3 recommendations are directed to the Securities Commissions, as are many of the recommendations directed at the IDA that will require securities commission support and approval.
SICAS membership was drawn from investment dealers, institutional investors, listed companies and self-regulatory organizations. The Committee consulted widely in its review of securities research analysts' practices, standards of conduct and supervision. The interim report from the committee was issued in April of this year.

Copies of this final report are available on tse.com.