Independence

Item sets dangle a “perk” and make you decide whether to refuse, restrict, or merely disclose it. The classic trap is the sell-side analyst flown on the issuer’s private jet or hosted at a lavish resort: best practice is to pay your own travel and lodging and use commercial transport (at your or your firm’s expense) so the issuer can’t shape your conclusion. Watch for issuer-paid research (best practice: a flat fee negotiated up front, not linked to your conclusion or recommendation, and disclosed), buy-side pressure to soften ratings, and allocation of oversubscribed IPO shares to personal accounts. The hinge is always whether the benefit could reasonably be expected to compromise judgment — actual bias need not be proven.

Don’t confuse independence with disclosure (VI-A): disclosing a conflict does not cure an independence problem — if a benefit threatens objectivity you must decline it, not merely reveal it. And independence sits under Professionalism, protecting the integrity of your analysis for clients and employers, whereas Integrity of Capital Markets (Standard II) guards the broader marketplace. Memory hook: “decline, don’t disclose.”