If they give research analysts bonuses based on performance of the investment banking division is that considered a direct relationship and a violation or indirect bc its just a bonus? or does the bonus have to be on overall perfromance of the company?
Does anyone have suggestions on things that reoccur that are recommended vs required?
I know pro-rata block trades is a recommendation that keeps coming up
This is a direct violation of ROS. As to the Standards, I think it’s not violation if it’s disclosed.
Wellif the bonus is strictly based on investment banking performance, I would see that as a glaring violation. If it is only indirectly because the bonus relies on company performance which in turn IB contributes to, there would still needs to be disclosure but as long as there is, it’s not a violation. At least that’s how I’ve been drilled by the questions I’ve taken…
Also, analyst compensation should be based on the accuracy of their research reports and recommendations.
“over time” they love to get you on that too