The company's more than 250 analysts will be required in their research reports to state whether they or any family members own stock in the companies mentioned, Goldman spokeswoman Kathleen Baum said. The revised policy took effect this week for U.S.-based analysts.
Goldman's actions come as its counterparts on Wall Street revised their policies last month and as Congress held a second hearing to address alleged conflicts of interest among investment banks.
Some critics say Goldman's revised policy is less stringent than other banks because it does not prohibit the ownership of stock in the companies analysts cover.
Merrill Lynch told its analysts that they were prohibited from owning stocks in the companies they cover, and embattled Credit Suisse First Boston, which is facing regulatory investigations for its IPO allocation practices, instituted a similar policy for both its stock and bond analysts.
The latest revision will be added to Goldman's policy of requiring analysts to get trading approval from the research director and compliance department before buying or selling any stock. The policy also bars analysts from selling a stock that they have a "buy" rating on at the time.
Wall Street banks were generally perceived as taking a "separation of church and state" approach, in which there was a split between the banking business, which handles the lucrative IPOs and mergers and acquisitions, and the research department.
Analysts were perceived as offering unbiased analysis, irrespective of the banking business their companies received from the companies they covered. But over the years, as regulations changed and the IPO market took off in the late 1990s, the lines of separation began to blur, industry experts say.
High-profile analysts, such as Merrill Lynch's Henry Blodget, and Morgan Stanley Dean Witter's Mary Meeker, have been hit with shareholder lawsuits over allegations of biased research.
"I think there is no question there is a conflict of interest," said James Cloonan, chairman of the American Association of Individual Investors, which represents 160,000 members. "But I can't think of an easy solution.
"If you want an analyst to be totally independent, you have to be willing to pay for their research," he said. "But, by and large, it's hard to get people to pay for it."