Top 3 challenges translating equity research reports

In China, a high volume of equity research reports are being translated between Chinese and English each day. This is mainly driven by commercial and regulatory reasons. On the commercial side, the A-Share market is paid close attention to by many foreign investment managers and quality research reports are necessary to cater to this audience segment. On the regulatory side, guidelines necessitate that the reports are to be published in a language (Chinese) different from the one drafted by the analysts (English).

It is well-known the translation of financial documents is more difficult than the general translation of business documents. It is less known that the translation of equity research reports is even more difficult than financial document.

Below are the top 3 challenges of translation of equity research reports:

1. Delivery in an Extremely Short Span of Time

The publication of equity research is typically under a tight deadline of delivery. An analyst may finish writing a report in the morning, and the same report will need to be translated by the afternoon to be submitted to the company's internal compliance team for clearance. It is a huge challenge for a translation teams to fullfil their duties accordingly under such time constraints on a day-to-day basis, particularly during company earning season when the translation workload increases.

2. Hiring Specialized Translators

All translations require linguistic ability, but translating equity research reports requires a great deal of financial expertise and years of experience in the field. The syntax, flow, and expressions used in an equity research report greatly differ from regular day-to-day language. A phrase such as "The stock accumulates a 18% YTD fall penalized by its Italian link and the resumption of risk-aversion towards periphery" may be obvious to those in the financial industry but definitely not to general translators.

3. Confidentiality & Sensitive Information

Since equity research typically refers to the performance of listed companies at a given time, the information contained the reports are highly sensitive and can affect the stock performance. For this reason equity research teams rarely outsource their translation workloads regardless of external cost-effective solutions. For the same reason, research teams are less reluctant to use cloud-based solutions for fear of breaching security protocols.

Given the increasing importance of, and the decreasing foreign restrictions on, the China A-Share market, the market has started to see more research reports being translated for different foreign audiences. It is becoming clear to most of the research teams that AI machine translation solutions are the best option to resolve the challenges and bottlenecks their teams face. At my company, TranslateFX, we have already worked with financial institutions to help implement AI translation tools in their company workflows for the purpose of research.