SEBI (Research Analyst) Regulations, 2014
(1) The Board considered and approved the draft SEBI (Research Analyst) Regulations, 2014.
(2) The SEBI (Research Analyst) Regulations, 2014 have been framed based on consultation with market participants and comments received from the public on the consultation paper and draft regulations for research analysts disseminated for this purpose.
(3) The salient features of the SEBI (Research Analyst) Regulations, 2014 are as under:
- (i) The Regulations seek to register and regulate individual research analysts and entities engaged in issuance of research reports or research analyses and/or publication of substance of research report or who provides research report or who makes 'buy/sell/hold’ recommendation of a security or who make recommendation on public offers such as Brokerage houses, merchant bankers, proxy advisors etc.
- (ii) Investment Advisers, Credit Rating Agencies, Portfolio Managers, Asset Management Companies, fund managers of Alternative Investment Funds or Venture Capital Funds shall not be required to be registered under these regulations.
- (iii) Internal communications that are not given to current or prospective clients and periodic reports or other communications prepared for unit holders of Mutual Fund or Alternative Investment Fund or clients of Portfolio Managers and Investment Advisers are not included in the definition of research report.
- (iv) Requirements relating to experience, qualification, certification and capital adequacy have been prescribed in the regulations for an individual person or an entity to act as research analyst.
- (vi) The regulations specify requirements to foster objectivity and transparency in research and provide investors with more reliable and useful information to make informed decisions.
- (vii) Requirements in relation to establishing, maintaining written internal policies and control procedures governing the dealing and trading by any research analyst have been prescribed in the regulations.
- (viii) Limitations on trading by research analysts have been prescribed in the regulations.
- (ix) Requirements in relation to compensation of research analysts have been prescribed in the regulations.
- (x) Limitations on publication of research reports and restrictions on public appearances have been prescribed in the regulations.
- (xi) The regulations specify that the research report prepared shall have complete disclosures in respect of financial interest, receipt of compensation, etc. so that investors can understand the actual or potential conflicts of interest and their likely impact on the quality of the research report published.
- (xii) The regulations specify provisions in relation to disclosures to be made in research reports and disclosures to be made during the public appearance.
- (xiii) The regulations specify restrictions on trading and on compensation of the persons who make comments or recommendations concerning securities or public offer through public media.
- (xiv) The regulations specify provisions for code of conduct, general responsibility, maintenance of records, etc.
- (xv) These regulations shall come into force on the ninetieth day from the date of their publication in the Official Gazette.