The corporate regulator plans to issue new rules to ensure separation of the research function at broking firms from the corporate advisory business.
Australian Securities and Investments Commission chairman Greg Medcraft on Thursday said it would soon release an updated guidance for sell-side research, clearly setting out rules for managing conflicts of interest and for handling non-public information.
"We have had some incidents, as you know. We have had some learnings about separating research and the underwriting function," he told reporters on the sidelines of the Stockbrokers and Financial Advisers Association conference in Sydney.
"We will make sure that the walls are pretty solid between the two. That there can't be pressure. What we've got to do is preserve the independence of research analysts, for people that are relying on them."
The new guidelines follow a review by ASIC last year on conflicts of interests related to research during the initial public offering process.
The review came after several instances of conflicts, including allegations that UBS changed a research report title relating to NSW privatisations, and an earlier case of Newcrest Mining selectively briefing analysts.
Mr Medcraft said the guidance will address the issue of restricting interactions between research analysts, corporate advisory and issuing companies during the capital raising process; recommendations in relation to structure and funding of research; and appropriate compliance functions.
"We actually think these measures will enable us to strike the appropriate balance between research analysts' contributions to a firm's decision to underwrite a transaction and maintaining the integrity of research," he said.
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