Frequently Asked Questions (FAQs) related to regulatory provisions for Research Analysts
Summary
This circular issues Frequently Asked Questions (FAQs) to clarify regulatory provisions for Research Analysts following the 2024 amendments. It mandates that persons associated with research services obtain NISM certification within one year and relaxes signature consent requirements for institutional investors. The document defines the scope of regulation, exemptions, and specific compliance obligations for various entities including proxy advisers. This section outlines the procedural requirements for obtaining registration as a research analyst, including application forms and fee structures. It defines key terms such as independent research analysts and public media while detailing specific disclosure obligations for recommendations made in public forums. Additionally, it establishes trading restrictions, capital adequacy exemptions, and compliance officer appointment mandates for research entities. Paragraphs 30 to 36 clarify the regulatory treatment of distribution activities, certification requirements, and client categorizations under the Research Analyst Regulations. The text establishes that brokerage or merchant banking services do not constitute distribution, while defi
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SEBI has notified SEBI (Research Analysts) (Third Amendment) Regulations, 2024 on December 16, 2024. Pursuant to these amendments, SEBI has issued a circular dated January 08, 2025 on guidelines for research analysts.
In order to provide clarity and guidance for compliance by RAs with the regulatory provisions, the details/clarifications are provided as part of the Frequently Asked Questions (FAQs) at Annexure A.
Persons associated with research services shall obtain the relevant certification from NISM as specified by SEBI within one year from the date of this circular.
Consent by signature on the terms and conditions including most important terms and conditions (MITC) shall not be mandatory for the clients who are institutional investors or qualified institutional buyers. However, RAs/research entities are required to disclose the terms and conditions of research services including MITC to these clients.
This circular is issued in exercise of powers conferred under section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Regulation 33 of Securities and Exchange Board of India (Research Analysts) Regulations, 2014.
Individuals employed as research analyst with a research entity are not required to obtain registration certificate from SEBI. The research entity... is required to obtain registration certificate... The individuals... are required to comply with qualification and certification requirements...
The personnel engaged in clerical activities/marketing activities, back office assistance, support services, etc., in relation to publication and/or distribution of research report are not covered under the definition of research analysts.
"Research report” does not include the following communications: comments on general trends; discussions on broad-based indices; commentaries on economic/political/market conditions; periodic reports for MF/AIF/PM/IA clients; internal communications not given to clients; offer documents/prospectus; statistical summaries; technical analyses relating to demand/supply in a sector/index.
Providing research services (including buy/sell/hold recommendation) on a security or securities based on any methodology (including the technical analysis) is not exempted from the purview of the RA Regulations. However, technical analyses relating to the demand and supply for a particular sector or index is exempted.
No. RA Regulations cover all securities as defined under clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956.
No person shall act as a research analyst or research entity or hold itself out as a research analyst unless he has obtained a certificate of registration from SEBI on and from the commencement of RA Regulations unless an exemption specifically applies.
SEBI registered Stock Brokers, Merchant Bankers and other intermediaries except those who are exempted... are required to make application for grant of registration under RA Regulations, if they are engaged in issuance of research reports or research analyses.
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Source: SecMarx — Frequently Asked Questions (FAQs) related to regulatory provisions for Research Analysts. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.