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To: semi2000 who started this subject	7/2/2001 7:57:08 PM
From: semi2000	of 6

NASD on self regulation ... too late and too little. a) will analyst ever report all or any position held by the owner company (including parent and child)? b) how about covered calls, short positions, underwriting, convertibles, m&a activity etc, will it be disclosed? c) day trading and market making activity in underlying security, how many disclose that? -- cbs.marketwatch.com NASD ponders analyst disclosure By Matt Andrejczak, CBS.MarketWatch.com Last Update: 6:23 PM ET July 2, 2001 WASHINGTON (CBS.MW)-The board of the National Association of Securities Dealers took steps on Monday to strengthen disclosure rules for analysts recommending stocks to investors. NASD approved for comment a proposed rule that would prohibit inconspicuous boilerplate disclosure, forcing analysts and other brokerage firm employees to disclose potential conflicts of interest when talking up a stock on television or radio. The move comes at a time when the industry is being pressured by lawmakers on Capitol Hill to clean up conflicts of interest that exist between an investment bank's sales and research departments. NASD, the nation's largest securities industry self-regulatory organization, has been working with the staffs at the Securities and Exchange Commission and other organizations for more than six months to develop uniform disclosure practices. It is considering whether analysts should disclose any financial interest in recommended stocks and any compensation received for investment banking services tied to the securities they tout. NASD is also asking its member firms to comment on whether the rule should be widened to include the nature of the investment banking services provided to a specific company and whether firms should disclose ownership interests of less than 5 percent. "This is just a step in an ongoing review of research analyst disclosure issues and we will continue to monitor the manner in which recommendations are provided to the investing public," said Mary Schapiro, president of NASD Regulation. The comment period runs until Aug. 15. At that time, the NASD will decide whether it plans to submit the proposed rule to the SEC, which must approve it. In a statement, the SEC said it was "encouraged by the NASD's attention to this important issue" but declined to comment any further because it may have to act on the proposal in the future. Last week, the SEC warned investors not to solely rely on analyst recommendations and encouraged the industry to improve its practices. Matt Andrejczak is a reporter for CBS.MarketWatch.com.

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