The Securities & Futures Commission is seeking public views on devising regulations to reduce and manage analyst conflicts of interest.

The commission's Executive Director of Intermediaries & Investment Products Alexa Lam said clearer and more specific guidelines are needed to address the potential and actual analyst conflicts that may exist in the Hong Kong market.

The proposals set out in the consultation paper cover the eight important areas suggested by the International Organisation of Securities Commissions. They are:

* Analyst trading and financial interests;

* Firm financial interests and business relationships;

* Analysts' reporting lines and compensation;

* Firm compliance systems and senior management responsibility;

* Outside influence;

* Clarity, specificity and prominence of disclosure;

* Integrity and ethical behaviour; and,

* Investor education.

Guidelines tailored to local market

Ms Lam said: "We are mindful the proposed guidelines should not stifle legitimate investment or sales ideas, or unnecessarily constrain the flow of information. We have tailored these guidelines to the characteristics of the local market, without impacting brokers' sales and dealing operations."

The proposals aim to strengthen the regulation of commission licensees only. The commission does not seek to impose any regulations on others, such as the media.

"We will keep an open mind to any suggestions regarding the proposed regulations and all comments will be duly considered in the consultation process," she said.

The guidelines are intended to be incorporated into the Code of Conduct for Persons Licensed by or Registered with the commission.

It aims to publish the consultation conclusions in the third quarter and implement the guidelines by year's-end.