Structured Biiz

Research Analyst

An individual registered as research analyst, individuals employed as  research  analyst  and  partners  of  a  research  analyst,  if  any,  engaged  in preparation  and/or publication   of   research   report   or   research analysis   shall   have   the   following   minimum qualifications, at all times:

Qualification & Capital Adequacy Requirement

A Research Analyst is a person who is responsible for preparation or publication of a search report through researching, analyzing, interpreting and presenting data related to securities market, operations, finance, economics, customers and other information related to the field they are engaged in. They are also responsible for providing research report, making  ‘buy/sell/hold’ recommendation; or giving price target; or offering an opinion concerning public offer with respect to securities that are listed or to be listed in a Stock Exchange.

Research Analysts exist in every industry, especially in the Securities Market. They are required to comply with the regulations framed under SEBI (Research Analyst) Regulations, 2014.

  • A professional qualification or post - graduate degree or post graduate diploma in finance, accountancy, business management, commerce, economics, capital market, financial services or markets provided by a University / Institute/ Association established by the Central Government or State Government as specifically described under the SEBI (Research Analyst) Regulations, 2014; or
  • A professional qualification or postgraduate degree or post graduate diploma which is accredited by All Indian Council for Technical Education, National Assessment and Accreditation Council or National Board of Accreditation or any other council/ board/ body set up under an Act of Parliament in India for the purpose; or
  • 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; and
  • An individual registered as Research Analyst under these regulations, individuals employed as Research Analyst and partners of a Research Analyst, if any, shall have, at all times, a NISM certification. (Certificate from the National Institute of Securities Market established by the SEBI);
  • A Research Analyst who is an individual or partnership firm shall have net tangible assets of value not less than Rs. 1 Lakh (Rupees One Lakh);
  • A Research Analyst who is a body corporate or limited liability partnership firm shall have a net worth of not less than Rs. 25 Lakhs (Rupees Twenty Five Lakhs).

Registration process for a Research Analyst

An application for grant of certificate of registration shall be made in prescribed form and shall be accompanied by a non-refundable application fee by giving following details:

  • General Information
  • Details of the applicant
  • Details of research services
  • Details of infrastructures
  • Other information/ Declarations/ Regulatory actions
  • Declaration Statement

Every applicant shall pay non-refundable application fees along with the application for grant of certificate of registration as under (specified in Second Schedule):

  • Individuals or Partnership Firms – Rs. 5,000/-
  • Proxy advisory firm – Rs. 5,000/-
  • Body Corporate including Limited Liability Partnership – Rs. 50,000/-
  • The Board may require the applicant to furnish further information or clarification for the purpose of consideration of the application.
  • The applicant or his authorised representative, if so required, shall appear before the Board for personal representation.

The Board shall take into account all matters which are relevant to the grant of certificate of registration and in particular the following:

  • whether the  applicant  is  an  individual  or  a  body  corporate  or  limited liability partnership firm?
  • Whether the applicant, individuals employed as research analysts and partners of the applicant, if  any, engaged in issuance of research reports are appropriately qualified and having NISM Certification as specified under the regulations?
  • whether the applicant fulfils the capital adequacy requirements?
  • whether the applicant, individuals employed as research analysts and partners of the applicant, if  any, are fit and proper persons?
  • whether the  applicant  has  the  necessary  infrastructure  to  effectively discharge  the activities of a research analyst?
  • whether the applicant or any person directly or indirectly connected with the applicant has in  the  past  been  refused  certificate  by  the  Board  and  if  so,  the  grounds  for  such refusal?
  • whether any disciplinary  action  has  been  taken  by  the  Board  or  any  other  regulatory authority  against  the  applicant  or  any  person  directly  or  indirectly  connected  to  the applicant under the respective Act, rules or regulations made thereunder?

SEBI on being satisfied with the requirements of all compliances of the application shall grant the certificate of registration. Upon grant of Certificate of Registration,  Registration Fees becomes payable as under:

  • For individuals or partnership firms – Rs. 10,000/- (Rupees Ten Thousand Only)
  • For proxy advisory firms – Rs. 10,000/- (Rupees Ten Thousand Only)
  • For Body Corporate including Limited Liability Partnerships – Rs. 5,00,000/- (Rupees Five Lakh Only)

The certificate of registration granted shall be valid till it is suspended or cancelled by the Board.

  1. The Research Analyst shall abide by the provisions of the Act and these regulations;
  2. The Research  Analyst  shall  forthwith  inform  the  Board  in  writing,  if  any  information  or particulars previously submitted to the Board are found to be false or misleading in any material particular or if there is any material change in the information already submitted;
  3. The Research Analyst registered under these regulations shall use the term ‘research analyst’ in all correspondences with its clients.

Liabilities for contravention of regulations

The liabilities of the research analyst or research entity who contravenes any  of  the  provisions  of  the  Act  or  any  regulations  or  circulars  issued thereunder; fails to furnish any information relating to its activity as a research analyst as required by the Board; furnishes  information  which  is  false  or  misleading  in  any  material particular; does not submit periodic returns or reports as required by the Board; does not cooperate in any enquiry, inspection or investigation conducted by the Board; fails to resolve the complaints or fails to give a satisfactory reply to the Board in this behalf, shall be dealt with in the manner provided under the Act or the Securities and Exchange Board of India (Intermediaries) Regulations, 2008.

Under the SEBI (Intermediaries) Regulations, 2008, SEBI may appoint a Designated Authority for inspection and investigation of the alleged offence by Research Analyst. After careful investigation and inspection, the Designated Authority may take the following measures:

  • i. Dispose of the proceedings without any adverse action;
  • ii. Cancel the Certificate of registration;
  • iii. Suspend the Certificate of registration;
  • iv. Prohibit the Research Analyst from taking up any new assignment or contract or launching a new scheme;
  • v. Debar an officer of Research Analyst from being employed or associated with any registered intermediary or other person associated with the securities market for a specified period;
  • vi. Debar a branch or an office of Research Analyst from carrying out such activities for a specified period;
  • vii. Issue a regulatory censure to the Research Analyst. After 5 regulatory censures, the registration of a Research Analyst may be cancelled, suspended or prohibited from taking up any new assignment.