Procedural Aspects of registration of as a Research Analyst by CS Komal Jain and CS Karuna Jain


Introduction:

Research Analyst means a person whose only business activity is research analysis, preparation and/or publication of research report. The main responsibility of Research Analyst are:

  1. preparation or publication of the content of the research report; or
  2. providing research report; or

iii. making 'buy/sell/hold' recommendation;

  1. giving price target; or
  2. offering an opinion concerning the public offer, with respect to securities that are listed or to be listed in a stock exchange.

Application for registration as Research Analyst:

Every person or entity seeking to be known as Research Analyst needs to get themselves registered as Research Analyst under SEBI (Research Analyst) Regulations, 2014.

The application for registration shall be made in form A.  Following conditions are required to be satisfied before making an application:

  1. Educational qualification of the applicant
  2. Capital Adequacy
  • Fit and proper person
  1. Availability of infrastructure
  2. Any previous refusal for registration being granted by SEBI.
  3. Whether any disciplinary action has been taken by the SEBI.

Requirements for registration as Research Analyst:

  • Qualification requirements:

As per regulation 7 of SEBI (Research Analyst) Regulations, 2014An individual registered, employed and are partners as research analyst under these regulations, shall have the following minimum qualifications, at all times:

  • A professional/ post-graduate degree or diploma in finance, accountancy, business management, commerce, economics, capital market, financial services or markets provided by:

(a) a university which is recognized by University Grants Commission or by any other commission/council/board/body established under an Act of parliament in India for the purpose; or

(b) an institute/association affiliated with such university; or

(c) an institute/ association/university established by the central government

or state government; or

(d) autonomous institute falling under the administrative control of Government of India.

  • professional qualification or post-graduate degree or post-graduate diploma which is accredited by All Indian Council for Technical Education, NationalAssessment and Accreditation Council or National Board of Accreditation or any other council/board/body set up under an Act of Parliament in India.
  • A graduate in any discipline with an experience of at least five years in activities relating to financial products or markets or securities or fund or asset or portfolio management.
  • Shall hold NISM certification for research analysts.
  • Capital adequacy requirements:

Net tangible assets

  • For Individuals/ Partnerships: Rs. 1.00 Lacs
  • For body corporate or limited liability partnership: Rs. 25.00 Lacs.
  • Payment of registration fees:

Every applicant seeking registration shall have to pay non-refundable application fees as undermentioned:

  • For individuals/ partnership firms/ proxy advisory firms: Rs. 5000/-
  • For Body Corporate/ LLP: Rs. 50000/-

Documents for registration:

The application so made for registration of Research Analyst shall be accompanied with duly attested copies of the following:

  • PAN of applicant
  • Registered office proof
  • Establishment/ Incorporation Proof
  • Details of Associate or related concerns of the applicant
  • Declaration certificate as to the compliance of minimum educational qualifications as per regulation.
  • Copy of Income Tax Return/ Copy of Form 16 for the last 3 years in case of the individual applicant.
  • Declaration as to necessary infrastructural facilities.
  • Declaration stating the applicant is the fit and proper person as per regulation of SEBI
  • Duly certified copy of Net worth certificate/ statement of assets and liabilities not older than 6 months from date of filing application.
  • Declaration to establish and follow internal policies and procedures.

Details required for registration:

  • Legal Status of Applicant
  • Shareholding Pattern/ ownership Pattern of the applicant.
  • Name, address of the registered office, address for correspondence and principal place of business.
  • contact No and Mail Address of the applicant.
  • Any other registration is being obtained from SEBI/RBI/IRDA.
  • Description of proposed services provided along with internal policies and other standard disclosures.
  • Details of office space, and other infrastructural facilities for the efficient discharge of services as a research analyst.
  • Details of any pending dispute or applicant have been indicted/involved in any economic offence in the last 5 years.

Procedure for making an application:

The application has been made online process on website: www.sebi.gov.in under head e-registration.

After completing all the documentation, the application for seeking registration in form A accompanied with all the address/ identity proof and declaration as required under the prescribed regulation is to be sent to Head Office (HO) or the concerned Regional Office(RO) for their scrutiny and assessment.

After receipt of all documentation officer in charge upon being satisfied on the correctness and truthfulness of documents will grant the certificate of registration or may call for further explanations or additional information if any further required for the same.

After receiving approval from SEBI, the applicant must pay the registration fee:

If the applicant is body corporate or Limited Liability Partnership Firm: Rs.5,00,000/-

If the applicant is Individual, partnership firm or proxy adviser: Rs.10,000/-

by way of bank draft in favour of “The Securities and Exchange Board of India”. On receipt of registration/ re-registration fees, SEBI will grant the applicant the certificate of registration.

Exemptions from obtaining registration:

Investment Advisers, Credit Rating Agencies, Asset Management Companies and Fund Managers of a mutual fund or alternative investment fund or venture capital fund or portfolio manager shall not be required to be registered under these regulations.

However, they are required to comply with Chapter III of these Regulations, if they issue research reports or their research report is circulated or distributed to the public or general investors and/or if they or their directors or employees make a public appearance.

Other compliances:

  • Trading restrictions imposed:

Research analyst or his associate shall not deal or trade any securities that the research analyst recommends or follows within 30 days before and 5 days after the publication of a research report on the subject company.

  • Appointment of a compliance officer:

Research analyst or research entity which is a body corporate or LLP is required to appoint a compliance officer who shall be responsible for monitoring the compliance in respect of the requirements of the Act

  • Renewal of certificate

A Research Analyst who has been granted a certificate of registration, to keep its registration in force, shall pay a required fee every five years, from the date of grant of certificate of registration or from the date of grant of certificate of registration granted prior to the commencement of the Securities and Exchange Board of India.

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How to get registered as a Research Analyst and Instructions for filling in Form A by SEBI

FREQUENTLY ASKED QUESTIONS (FAQs): SEBI (RESEARCH ANALYSTS) REGULATIONS, 2014
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