The engagement is small. The reputational exposure is not. A research vendor publishes under your ticker, to your investors, with your money in the disclosure. These are the ten questions that separate a defensible engagement from one that ends up in an enforcement footnote.
Ask for the disclosure language before the proposal. Ask what every figure is sourced to. Ask whether the vendor or its principals hold or trade the stock. Ask exactly who receives the research and how they opted in. Ask what happens to the page after the campaign. Ask whether the vendor will publish risks and decline a favorable conclusion. Ask for the contract, the compliance packet, and a published example. If any answer is vague, the vendor is selling promotion under a research label.
Section 17(b) of the Securities Act requires a paid publisher to disclose the compensation, its source, and its amount on the material itself. Ask for a link to a published report and find the disclosure without scrolling to a separate legal page. If it is missing, generic, or hidden in a footer, the vendor's other clients are already exposed and you will be next.
A research report should trace every number to a filing, a press release, or a named third-party data provider. Ask the vendor to point to sources in a sample report. Proprietary models, undisclosed estimates, and figures that cannot be reproduced from the public record are how a report becomes a misleading statement.
The cleanest answer is a written no-ownership policy: no position during coverage and for a period after publication. Vendors who trade around their own publications have been the subject of enforcement actions, and the company whose ticker appears in the report shares the headline.
Distribution is where the value lives and where claims get loose. Ask for the size of the list, how recipients opted in, and whether the count is subscribers or impressions. A network built over years from free research is worth more than a rented list of the same size, and it behaves differently on publication day.
Ask directly whether the report will name risks and whether the vendor has ever declined to publish a favorable conclusion. A vendor that promises positive coverage is describing an advertisement. Readers, and regulators, can tell the difference within a page.
There should not be. A paid publisher issuing targets or recommendations invites exactly the scrutiny the disclosure regime is designed to survive. Documented research describes the business and the conditions under which the thesis fails. It does not tell anyone what to do.
Promotion rotates. Research stays. Ask whether the page is permanent, whether it is indexed by search engines, and whether the vendor has ever taken client pages down. The answer tells you whether you are buying a record or a campaign.
The company should review for factual accuracy, not for tone or conclusion. A vendor that lets the company rewrite the thesis is not independent, and a report the company wrote is a press release with a byline. Ask to see the approval language in the contract.
Read for scope, deliverables, the disclosure text, the ownership policy, the distribution commitment, the publication window, the permanence of the page, and what the company is and is not paying for. Any term that ties payment to price movement, volume, or a conclusion should end the conversation.
A serious vendor has one ready: entity information, the disclosure framework, the ownership policy, sourcing standards, and a published example. It exists so your counsel can sign off in an afternoon. If the vendor has to write it after you ask, that is your answer.
Watchlist Wire publishes the compensation disclosure on every report, sources every figure to a filing, holds no position in any company it covers during coverage or for 90 days after publication, and keeps every dossier permanently published and indexed. Companies are screened against five published criteria and some are declined. The vendor due diligence packet is available on request at contact@watchlistwire.com.
It should state that the publisher was compensated, by whom, and how much, and it should appear on the research itself. Watchlist Wire's briefing on Section 17(b) disclosures walks through the four required elements with an annotated example.
Nothing in the disclosure rule prohibits it outright, but ownership plus paid publication is the pattern behind most enforcement actions in this area. A written no-ownership policy is the standard a CFO should require.
Ask how recipients opted in, whether the figure counts subscribers or impressions, and how long the list has been built. Vendors that built their audience with free research over years can describe it precisely. Rented lists cannot.
Factual accuracy only. The company should confirm that figures and descriptions are correct. It should not edit the thesis, the risks, or the conclusion, because an independent report the issuer rewrote is no longer independent.
Entity information, the disclosure framework, the ownership policy, sourcing standards, and a published example, ready for legal review.
Institutional Partnership Read the Section 17(b) briefing