“Those enthusiastic analyst recommendations investors read in Wall Street research reports or hear when tuned into business television shows soon may come with more-detailed disclosure,” The Wall Street Journal is reporting today.

“In the latest attempt to address potential conflicts of interest, the National Association of Securities Dealers has proposed mandating that analysts disclose ownership in companies they cover and that brokerage houses disclose definitively any investment-banking relationships. A brokerage house also would be required to tell if its stake in a company being covered is more than 5%; the NASD is asking whether the threshold should be as low as 1%.

ÔThe NASD proposal would further require that analysts and other brokerage-house employees disclose during TV interviews and other public appearances whether they own the shares they discuss.

“Though the subject of conflicts of interest for analysts has been around for ages, the issue has gained new prominence in the wake of last year’s tech-stock meltdown. Individual investors rushed into the market in the late 1990s on the advice of ebullient analysts, often not realizing that analysts aren’t always as independent as investors might think, and many portfolios have suffered as the widely watched indexes headed south. Recently, Congress held hearings on this issue, while a securities-industry trade group announced a set of so-called best practices that brokerage houses agreed to follow.

“All of this new information proposed by the NASD would have to be displayed on the cover of every research report in a type size no smaller than the buy, sell or hold recommendation itself. The NASD realizes it can’t force TV and radio stations to air an analyst’s disclosure, but both CNBC and CNNfn said they already have policies in place that require this.

“The Securities and Exchange Commission would have to approve any proposal that emerges. Because of that, the agency will say only that it is “encouraged by the NASD’s attention to this important issue.” Merrill Lynch & Co., the nation’s largest brokerage house and one of the top investment-banking firms, declined to comment.

“One of the biggest controversies centers on analysts’ owning positions in companies they cover. Under current NASD rules, analysts and brokerage houses must disclose any ownership or any business ties they might have with the company in question. That disclosure typically takes the form of a generic boilerplate similar to what Merrill Lynch recently began posting on the front of its reports: The firm “has or may have business relationships, including investment-banking relationships, with the companies in this report.”

“The proposal, if approved, would mandate that analysts say for certain whether they own shares of a company. And, depending on the rule’s final structure, analysts may have to specify how many shares, too. Likewise, firms would be required to disclose ownership of 5% or more of the company.