The Securities and Exchange Board of India (SEBI), on August 9th, 2024, issued a draft circular on periodic reporting format for Research Analyst (RA) and Proxy Advisers (PA).
It looks like SEBI has all its eye on Research Analysts. SEBI is constantly updating its rules and mechanism to ensure that all the RAs are following the regulations. To enable that SEBI has not introduced periodic reporting for the RA.
Periodic Reporting was mandated for Investment Advisers this year and now SEBI shall implement it for RAs too.
Lets’ find out the reporting requirements:
Periodicity of Reporting
RAs and PAs will be required to submit their reports twice a year, for the periods ending on September 30 and March 31 of every financial year.
The due date for reporting is yet to be communicated by RAASB.
Important points to be taken care of while periodic reporting:
While reporting following items are to be disclosed:
1.    Complete SEBI and BSE India registration details:
This shall include registration nos. Logo details, Office address, no. of branch offices along with address of each branch, no. of employees and official website address.
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2.    Details of Social Media Handles as an RA:
The details of all social media platforms shall be provided i.e., Facebook, LinkedIn, Instagram, Twitter, etc.
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3.    Details of Bank Account:
The RA will have to disclose the account details that are being used to receive fees from clients.
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4.    Details of Compliance Officer, KMPs, Contact Person etc.:
The details of name, date of birth, mobile no., email Id, of the compliance officer, directors, contact person, partners etc shall be disclosed in the report. The shareholding pattern of the entity must be also reported.
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5.    Details of Research Analyst:
Total no. of persons employed as RA along with their name, DOB, PAN Card no. email ID, contact details, NISM validity shall be reported.
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6.    Details of Inspection:
In case there has been an inspection by SEBI or RAASB, the same shall be reported.
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7.    Details of Advertisement issued:
No. of advertisement issued during the half yearly period and advertisements approved by RAASB has to be reported.
8.    Investor Charter and Complaints:
You need to confirm if you are complying with the requirement of this regulation.
9.    Details of Research Reports:
The details of research reports issued shall be reported. The nos. of reports shall be bifurcated on the basis of fundamental and technical and shall be reported separately.
10. Public Appearances:
The number of public appearances made by RA/its Director/ analyst shall be reported.
11. Details of Complaints against the Research Analyst:
The details of all the complaints received, resolved and pending against the RA shall be reported by the RA.
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12. Details of Clients and Fees charged:
The no. of clients which include bifurcation of previous, new additions and clients who longer avail your services shall be reported along with detail of fees charged to them. Â
Two points to ponder on:
Now all the RAs need to keep a record of there social media handles as well and shall report it to RAASB.
Approval for advertisement by RAASB. Till now it was required by the Investment Advisers only, but now looks like RAs do need to comply with the same. However, we still await any circular with respect to approval on advertisement by RA.
It is very clear that SEBI is in all mood to bring the IAs and RAs under the same compliance ambit. However, the increasing compliance requirement may become quite a challenge for RAs to comply with especially for individual RAs.
To read the draft circular, click here.
For further queries, please contact us at anjalibansalcs@gmail.com.
Disclaimer:Â While every effort has been made to ensure the accuracy of this article, Anjali Bansal and Associates assumes no responsibility for any errors or omissions. This document does not substitute professional advice, and readers should seek guidance before acting on any information contained herein.
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