Do I fall under the purview of SEBI Research Analyst Regulations?
Confused? You are no exception.
Many of you have this question going on in your head.
There is a lot of confusion among the people involved in research activities as to when do they fall under the purview of SEBI (Research Analyst) Regulation, 2014 (RA Regulation), which also holds them back to take their research activities to next level.
SEBI in 2014 had introduced RA Regulations to foster objectivity and transparency in security research and provide investors with more reliable and useful information to make investment decisions.
SEBI by its definition of “research analyst” and “research report” has fairly indicated on when one needs to get themselves register as Research Analyst.
To understand in detail, let us first understand-
Who is a Research Analyst?
A research analyst means a person who is primarily responsible for preparation or publication of content of research report, provide research report, making buy/sell/hold recommendation, gives price target or offer an opinion concerning public offer with respect to securities that are listed or to be listed in a stock exchange.
What is a Research Report?
A research report means any written or electronic communication that includes research analysis or research recommendation or an opinion concerning securities or public offer, providing a basis for investment decision.
For whom SEBI registration is necessary?
A person who is -
1. engaged in preparation or publication of the content of research reports;
2. responsible for providing research reports;
3. making ‘buy/sell/hold’ recommendation on securities;
4. giving price targets on securities;
5. offering an opinion concerning IPO, further public offer, offer for sale, disinvestments, takeover, buy-back or delisting of securities;
It further includes-
1. Any associated person who reports directly or indirectly to such a research analyst in connection with activities like giving price targets and preparing research reports.
2. A SEBI registered merchant bankers, investment bankers or stock brokers or underwriters who are also engaged in providing research reports.
If you fall under any of the above category, you are required to get yourself registered with SEBI.
For whom SEBI registration is not necessary?
Any person who -
1. comments on general trends in the securities market.
2. discusses on the broad-based indices.
3. comments on economic, political or market conditions.
4. gives statistical summaries of financial data of companies.
5. gives technical analysis relating to demand and supply in a sector or index based on trading volume and price.
6. is engaged in clerical activities/ marketing activities, back office assistance, support services etc. in relation to publication and/or distribution of research report.
It further includes-
1. Periodic reports such as sending financial account statements, annual reports or other communications prepared by unit holders of mutual funds or AIFs or clients of portfolio managers and investment advisers.
2. Any internal communication that are not given to current or prospective clients.
3. Any communication that constitute offer documents or prospectus that are circulated as per regulations made by the Board.
4. An Investment Advisers, Credit Rating Agencies, Asset Management Companies and Fund Managers (i.e. fund managers of a mutual fund or AIFs or venture capital fund or portfolio managers. However, they are required to comply with the provisions of Chapter III of the RA Regulation if they issue research reports or research analysis.
If you fall on any of the above category, you can relax as SEBI registration is not required for you.
I have tried to put all the points for ease of your understanding. In case you have any specific question on whether you need to apply for SEBI registration or not, you may write to me at email@example.com or reach out to me at 9148973085.