Table: Cleaning Up the Street

THE ENFORCERS:

THE PLAN

New York Attorney General Spitzer, the SEC, and other regulators want to strengthen rules to insulate analysts from investment bankers. A new oversight board will also force banks to give retail investors reports from 20 independent research outfits alongside their own.

THE FINANCING

Banks will contribute to a $1 billion five-year budget to fund the independents' research. But big banks are haggling over the bill, and research outfits say it's chump change.

THE PROBLEMS

Banks still want analysts' help in deciding which companies to underwrite. Moreover, little is known yet about how the board will function, who will sit on it, and how closely it will monitor the quality and accuracy of research. Worse, low fees and the fear of being tainted may keep good research outfits from joining.

CITIGROUP:

THE PLAN

Research analysts will be split from investment banking in a separate subsidiary to be called Smith Barney, reporting to Chairman and CEO Weill. They'll be joined by 12,500 retail brokers in a unit overseen by newly hired research hotshot Sallie L. Krawcheck.

THE FINANCING

Smith Barney will be funded by fees from the private client group and institutional investors. Citigroup (C ) says the unit will be profitable, but if the research it provides isn't stellar, in-house asset managers won't want to pay for it.

THE PROBLEMS

Citigroup's reputation in research has been badly tarnished. Krawcheck will have to shift analysts' focus from earning banking fees to serving clients, enforce tough new standards, and defend her unit's independence. She will also have to determine how much contact analysts and bankers can have.

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