4.6.6. Disclosure in Research Reports
Written policies and procedures must ensure that purported facts in research reports are based on reliable information and that recommendations have a reasonable basis and are clearly explained.
If the firm employs a rating system, it must clearly define in its research reports the meaning of each rating, including the time horizon and any benchmarks on which the rating is based. Such reports must also disclose the percentage of all securities rated by the member firm to which it has assigned a “buy,” “hold/neutral,” or “sell” rating and the percentage of companies within each of these three categories for which the firm has provided investment banking se