Firms or institutions on this side include investment banks, brokerages and market makers, who facilitate offering securities to investors, conducting research and creating financial products.
The research reports ultimately published contain earnings forecasts, future prospects and recommendations as previously mentioned.
[3] In addition to the aforementioned, sell side analysts have the responsibility to take time and develop relationships with their clients as well as the companies they are researching.
[2] Sell side analysts are responsible for creating a pitch, usually in the form of a book, that is then presented to prospective clients usually for new stock.
Analyst performance is ranked by a range of services such as StarMine owned by Thomson Reuters, Institutional Investor magazine, TipRanks, or Anachart.
[4] After the bursting of the dot-com bubble, many US sell side firms were accused of self-dealing in a lawsuit brought by New York Attorney General Eliot Spitzer.
To try to prevent the publishing of negative research, corporate clients would pressure the sell side firms by threatening to withhold lucrative banking business or equally lucrative shares in IPOs - essentially bribing the sell side firm.
Other provisions such as the Sarbanes–Oxley Act (2002) and other regulations were enacted by the Securities and Exchange Commission in response to public outcry following the legal concerns.
One issue that has been brought up has been the idea of sell side stock rankings and maintaining a positive rating for an extended period of time.
However, analysts also have the desire to receive incentives to make positive recommendations because brokerage firms in and of themselves have internal conflicts of interest between differing departments such as trading, underwriting and sales.
Hence the trade-off or conflict of interest for an analyst would be the need for generating their firm business and their own personal career goals.
[5] Under Chinese wall restrictions there is a threat of litigation, leading analysts to have less of an issue with bias in their research.
A Chinese wall restriction is used to make sure important and private information is not inadvertently shared or "leaked" and that all clients within large multinational firms are protected.