---
kind: "section"
citation: "15 U.S.C. § 78o–6"
title: "15"
title_heading: "Commerce and Trade"
number: "78o–6"
heading: "Securities analysts and research reports"
release: "119-102"
url: "https://uscodex.org/usc/15/78o-6"
units:
  - "Chapter 2B — Securities Exchanges"
---

# §78o–6. Securities analysts and research reports

- (a) **Analyst protections—** The [Commission](/usc/15/78c.md?p=a-15), or upon the authorization and direction of the [Commission](/usc/15/78c.md?p=a-15), a registered [securities](/usc/15/78c.md?p=a-10) [association](/usc/15/657h.md?p=a-2) or [national securities exchange](/usc/15/9009a.md?p=a-5), shall have adopted, not later than 1 year after July 30, 2002, rules reasonably designed to address conflicts of interest that can arise when [securities analysts](#d-1) recommend [equity securities](/usc/15/78c.md?p=a-11) in [research reports](#d-2) and public appearances, in [order](/usc/15/8702.md?p=14) to improve the objectivity of research and provide investors with more useful and reliable information, including rules designed—
  - (1) to foster greater public confidence in [securities](/usc/15/78c.md?p=a-10) research, and to protect the objectivity and independence of [securities analysts](#d-1), by—
    - (A) restricting the prepublication clearance or approval of [research reports](#d-2) by [persons](/usc/15/78c.md?p=a-9) employed by the [broker or dealer](/usc/15/78c.md?p=h-2) who are engaged in investment banking activities, or [persons](/usc/15/78c.md?p=a-9) not directly responsible for investment research, other than legal or compliance staff;
    - (B) limiting the supervision and compensatory evaluation of [securities analysts](#d-1) to officials employed by the [broker or dealer](/usc/15/78c.md?p=h-2) who are not engaged in investment banking activities; and
    - (C) requiring that a [broker or dealer](/usc/15/78c.md?p=h-2) and [persons](/usc/15/78c.md?p=a-9) employed by a [broker or dealer](/usc/15/78c.md?p=h-2) who are involved with investment banking activities may not, directly or indirectly, retaliate against or threaten to retaliate against any [securities analyst](#d-1) employed by that [broker or dealer](/usc/15/78c.md?p=h-2) or its affiliates as a result of an adverse, negative, or otherwise unfavorable [research report](#d-2) that may adversely affect the present or prospective investment banking relationship of the [broker or dealer](/usc/15/78c.md?p=h-2) with the [issuer](/usc/15/78c.md?p=a-8) that is the subject of the [research report](#d-2), except that such rules may not limit the [authority](/usc/15/3051.md?p=1) of a [broker or dealer](/usc/15/78c.md?p=h-2) to discipline a [securities analyst](#d-1) for causes other than such [research report](#d-2) in accordance with the policies and procedures of the firm;
  - (2) to define periods during which [brokers](/usc/15/78c.md?p=a-4-A) or [dealers](/usc/15/78c.md?p=a-5-A) who have participated, or are to participate, in a public offering of [securities](/usc/15/78c.md?p=a-10) as [underwriters](/usc/15/78c.md?p=a-20) or [dealers](/usc/15/78c.md?p=a-5-A) should not publish or otherwise distribute [research reports](#d-2) relating to such [securities](/usc/15/78c.md?p=a-10) or to the [issuer](/usc/15/78c.md?p=a-8) of such [securities](/usc/15/78c.md?p=a-10);
  - (3) to establish structural and institutional safeguards within registered [brokers](/usc/15/78c.md?p=a-4-A) or [dealers](/usc/15/78c.md?p=a-5-A) to assure that [securities analysts](#d-1) are separated by appropriate informational partitions within the firm from the review, pressure, or oversight of those whose involvement in investment banking activities might potentially bias their judgment or supervision; and
  - (4) to address such other issues as the [Commission](/usc/15/78c.md?p=a-15), or such [association](/usc/15/657h.md?p=a-2) or [exchange](/usc/15/78c.md?p=a-1), determines appropriate.
- (b) **Disclosure—** The [Commission](/usc/15/78c.md?p=a-15), or upon the authorization and direction of the [Commission](/usc/15/78c.md?p=a-15), a registered [securities](/usc/15/78c.md?p=a-10) [association](/usc/15/657h.md?p=a-2) or [national securities exchange](/usc/15/9009a.md?p=a-5), shall have adopted, not later than 1 year after July 30, 2002, rules reasonably designed to require each [securities analyst](#d-1) to disclose in public appearances, and each [registered broker or dealer](/usc/15/78c.md?p=h-2) to disclose in each [research report](#d-2), as applicable, conflicts of interest that are known or should have been known by the [securities analyst](#d-1) or the [broker or dealer](/usc/15/78c.md?p=h-2), to exist at the time of the appearance or the date of distribution of the report, including—
  - (1) the extent to which the [securities analyst](#d-1) has debt or equity investments in the [issuer](/usc/15/78c.md?p=a-8) that is the subject of the appearance or [research report](#d-2);
  - (2) whether any compensation has been received by the [registered broker or dealer](/usc/15/78c.md?p=h-2), or any affiliate thereof, including the [securities analyst](#d-1), from the [issuer](/usc/15/78c.md?p=a-8) that is the subject of the appearance or [research report](#d-2), subject to such exemptions as the [Commission](/usc/15/78c.md?p=a-15) may determine appropriate and necessary to prevent disclosure by virtue of this paragraph of material non-public information regarding specific potential future investment banking transactions of such [issuer](/usc/15/78c.md?p=a-8), as is appropriate in the public interest and consistent with the protection of investors;
  - (3) whether an [issuer](/usc/15/78c.md?p=a-8), the [securities](/usc/15/78c.md?p=a-10) of which are recommended in the appearance or [research report](#d-2), currently is, or during the 1-year period preceding the date of the appearance or date of distribution of the report has been, a client of the [registered broker or dealer](/usc/15/78c.md?p=h-2), and if so, stating the types of services provided to the [issuer](/usc/15/78c.md?p=a-8);
  - (4) whether the [securities analyst](#d-1) received compensation with respect to a [research report](#d-2), based upon (among any other factors) the investment banking revenues (either generally or specifically earned from the [issuer](/usc/15/78c.md?p=a-8) being analyzed) of the [registered broker or dealer](/usc/15/78c.md?p=h-2); and
  - (5) such other disclosures of conflicts of interest that are material to investors, research analysts, or the [broker or dealer](/usc/15/78c.md?p=h-2) as the [Commission](/usc/15/78c.md?p=a-15), or such [association](/usc/15/657h.md?p=a-2) or [exchange](/usc/15/78c.md?p=a-1), determines appropriate.
- (c) **Limitation—** Notwithstanding [subsection (a)](#a) or any other provision of law, neither the [Commission](/usc/15/78c.md?p=a-15) nor any national [securities](/usc/15/78c.md?p=a-10) [association](/usc/15/657h.md?p=a-2) registered under [section 78o–3](/usc/15/78o–3.md) of this title may adopt or maintain any rule or regulation in connection with an initial public offering of the common equity of an [emerging growth company](/usc/15/78c.md?p=a-80)—
  - (1) restricting, based on functional role, which associated [persons](/usc/15/78c.md?p=a-9) of a [broker](/usc/15/78c.md?p=a-4-A), [dealer](/usc/15/78c.md?p=a-5-A), or [member](/usc/15/78c.md?p=a-3-A) of a national [securities](/usc/15/78c.md?p=a-10) [association](/usc/15/657h.md?p=a-2), may arrange for communications between a [securities analyst](#d-1) and a potential investor; or
  - (2) restricting a [securities analyst](#d-1) from participating in any communications with the management of an [emerging growth company](/usc/15/78c.md?p=a-80) that is also attended by any other associated [person](/usc/15/78c.md?p=a-9) of a [broker](/usc/15/78c.md?p=a-4-A), [dealer](/usc/15/78c.md?p=a-5-A), or [member](/usc/15/78c.md?p=a-3-A) of a national [securities](/usc/15/78c.md?p=a-10) [association](/usc/15/657h.md?p=a-2) whose functional role is other than as a [securities analyst](#d-1).
- (d) **Definitions—** In this section—
  - (1) the term “securities analyst” means any associated [person](/usc/15/78c.md?p=a-9) of a [registered broker or dealer](/usc/15/78c.md?p=h-2) that is principally responsible for, and any associated [person](/usc/15/78c.md?p=a-9) who reports directly or indirectly to a securities analyst in connection with, the preparation of the substance of a [research report](#d-2), whether or not any such [person](/usc/15/78c.md?p=a-9) has the job title of “securities analyst”; and
  - (2) the term “research report” means a written or electronic communication that includes an analysis of [equity securities](/usc/15/78c.md?p=a-11) of individual [companies](/usc/15/78c.md?p=a-19) or industries, and that provides information reasonably sufficient upon which to base an investment decision.

## Source credit

(June 6, 1934, ch. 404, title I, § 15D, as added Pub. L. 107–204, title V, § 501(a), July 30, 2002, 116 Stat. 791; amended Pub. L. 112–106, title I, § 105(b), Apr. 5, 2012, 126 Stat. 311.)

## Notes

### Editorial Notes

### Amendments

2012—Subsecs. (c), (d). Pub. L. 112–106 added subsec. (c) and redesignated former subsec. (c) as (d).

### Statutory Notes and Related Subsidiaries

### Post Offering Communications

Pub. L. 112–106, title I, § 105(d), Apr. 5, 2012, 126 Stat. 311, provided that: “Neither the [Securities and Exchange] Commission nor any national securities association registered under section 15A of the Securities Exchange Act of 1934 [15 U.S.C. 78o–3] may adopt or maintain any rule or regulation prohibiting any broker, dealer, or member of a national securities association from publishing or distributing any research report or making a public appearance, with respect to the securities of an emerging growth company, either— within any prescribed period of time following the initial public offering date of the emerging growth company; or within any prescribed period of time prior to the expiration date of any agreement between the broker, dealer, or member of a national securities association and the emerging growth company or its shareholders that restricts or prohibits the sale of securities held by the emerging growth company or its shareholders after the initial public offering date.”

### Commission Authority

Pub. L. 107–204, title V, § 501(c), July 30, 2002, 116 Stat. 793, provided that: “The Commission may promulgate and amend its regulations, or direct a registered securities association or national securities exchange to promulgate and amend its rules, to carry out section 15D of the Securities Exchange Act of 1934 [15 U.S.C. 78o–6], as added by this section, as is necessary for the protection of investors and in the public interest.”