All you need to know about SEBI Research Analyst Registration

Once you plan to undertake activities of a Research Analyst, before starting to offer your services you need to get yourself registered with SEBI as a Research Analyst/ Research Entity. Registration is a straight forward process though dedicated online portal. The process is completely online and transparent.

Questions you encounter once you decide to act as a Research Analyst:

1. What is Research Analyst or Research Entity?

When you plan to register with SEBI as an individual, you are termed as an “Independent Research Analyst” and if you plan to register with SEBI as a non-individual i.e. partnership firm/ LLP/ Company/ any other form other than individual, you are termed as “Research Entity”. In case of non-individual registration, you need to employ some person as a research analyst to undertake the activities of a research analyst.

Definitions as per SEBI RA regulation:

1. “research analyst” means a person who is primarily responsible for,-

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

3. providing research report; or

4. making ‘buy/sell/hold’ recommendation; or

5. giving price target; or

6. offering an opinion concerning public offer,

with respect to securities that are listed or to be listed in a stock exchange, whether or not any such person has the job title of ‘research analyst’ and includes any other entities engaged in issuance of research report or research analysis.

Explanation.-The term also includes any associated person who reports directly or indirectly to such a research analyst in connection with activities provided above;

“research entity” means an intermediary registered with Board who is also engaged in merchant banking or investment banking or brokerage services or underwriting services and issue research report or research analysis in its own name through the individuals employed by it as research analyst and includes any other intermediary engaged in issuance of research report or research analysis;

2. Whether Services that I/we plan to offer require SEBI registration?

Not making it difficult to decide, we would mention the thumb rule for you- If you plan to provide a recommendation or offer an opinion, concerning securities or public offer, you would require this registration. The services under the Research Analyst activities are provided by two means-

• Research Report
• Recommendations

Here, recommendations are usually in the form of calls accompanied by target price, stop loss etc. The same may be based on fundamental analysis or technical analysis or both. Some of the analysts provide recommendations with disclosing the background analysis.

On the other side, the services may be delivered in the form of Research Reports. The definition of Research Report as included in the regulation would give you much needed idea on the specifics and exclusions.

Definition as per Regulation-

“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 and does not include the following communications:-

• comments on general trends in the securities market;
• discussions on the broad-based indices;
• commentaries on economic, political or market conditions;
• periodic reports or other communications prepared for unit holders of mutual fund or alternative investment fund or clients of portfolio managers and investment advisers;
• internal communications that are not given to current or prospective clients;
• communications that constitute offer documents or prospectus that are circulated as per regulations made by the Board;
• statistical summaries of financial data of the companies;
• technical analysis relating to the demand and supply in a sector or the index;
• any other communication which the Board may specify from time to time;

The above definition from the Regulation should help you in deciding whether your planned activities are excluded from the definition of Research Report or not.

There is a thin line that need not be crossed if you are planning to not get registered for e.g.

1. Primarily, you may report facts but you must refrain from providing opinions based on those facts. The same would simply mean you may supply the information to the users and let them draw an inference and reach a conclusion.

2. With respect to individual securities, you should only provide a summary of the financial data, which is a publically available information, without making any inference or opinion on the same.

3. You may make comments/ analysis/ inference on macro and microeconomic factors

3. What are the eligibility criteria’s and other primary requirements for SEBI Research Analyst Registrations?

Below are the primary eligibility criteria’s and requirements for securing the registration as a Research Analyst/ Research Entity:

Qualification

1. 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 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
  • an institute/association affiliated with such university; or
  • an institute/ association/university established by the central government or state government; or
  • autonomous institute falling under the administrative control of Government of India; or

2. Professional qualification or post-graduate 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 professional qualification by completing a Post Graduate Program in the Securities Market (Research Analysis) from NISM of a duration not less than one year; or

3. A graduate in any discipline with an experience of at least five years in activities relating to financial Some key points to remember here:

• • Foreign course / degree/ diploma certificates are not valid
  • Experience of personal trading in securities market is not accepted as an experience validation

Certification

An individual registered as research analyst under these regulations, individuals employed as a research analyst, and partners of a research analyst, if any, shall have, at all times, a NISM certification for research analysts as specified by the Board or other certification recognized by the Board from time to time.

NISM Certificate- NISM-Series-XV: Research Analyst Certification

Capital Adequacy/ Net-worth

For the purpose of capital adequacy, you would need a Net-worth certificate from a Chartered Accountant, not more than six months old at the time of filing of the application. Below are the requirements with respect to Capital Adequacy:

• A research analyst who is an individual or partnership firm shall have net tangible assets of value not less than one lakh rupees.
• A research analyst who is a body corporate or limited liability partnership firm shall have a net worth of not less than twenty-five lakh rupees.

“net worth” means the aggregate value of paid-up share capital plus free reserves (excluding reserves created out of revaluation) reduced by the aggregate value of accumulated losses.

4. What are the documents required for Research Analyst Registration?

During the application process, you would require multiple documents to be submitted. Most of the documents are submitted along with the application, however, some of the documents are asked in queries raised during the application processing. The documents asked during the processing of the application may vary for the applicants. Below is the indicative list of documents that you would require for application submission and processing:

A. Proof of identification and Address:

With Application:

• PAN
• AADHAAR

During processing:

• Passport
• School Leaving Certificate

 B. Capital Adequacy and Qualification Certificates

• Graduation or Post Graduation Certificate
• Experience Certificate (Applicable for graduate applicant)
• Net Worth Certificate from Chartered Accountant
• ITR of last three Years
• NISM Certificate

Mark sheets of educational qualifications (from secondary till post-graduation) and supporting documents for the items mentioned in the net-worth certificate may be sought during the application processing.

 C. Declarations

• Declaration of Compliance with Relevant Clauses of Chapter of III of the Regulations
• Declaration of Compliance with Schedule II of SEBI Regulations (specifying the 4 criteria)
• Declaration of Compliance with Regulation 7 (1) of Research Analysts Regulations 2014
• Declaration of Compliance with Regulation 7 (2) of Research Analysts Regulations 2014
• Declaration of Availability of Necessary Infrastructure

Several other declarations may be sought during application processing.

D. Infrastructure

Details of existing infrastructure for research analyst services are sought as part of the application form along with supporting documents. Details with respect to office space, furniture, and fixtures, software configuration, hardware configuration, software support, hardware support etc is asked as part of infrastructure facility available with the applicant.

E. Policy related documents

Below proposed policy and procedure documents for Research services are to be submitted along with the registration application

• Standard Disclosures
• Internal policy and procedures

F. Research Activities and business plan

Along with the application form below details are to be submitted-

• Business plan
• Current activities

During the application, processing queries may be asked to provide the details of proposed services and products to be offered as Research analyst activities along with their commercials.

5. What are the Fees charged for Research Analyst Registration?

At the time of filing the application, you need to pay non-refundable application fee and once your registration is approved, you need to pay the Registration Fee for securing the registration and getting the printed certificate.

Applicant Category	Application Fees (Rs.)	Registration Fees (Rs.)
Individuals and Partnership Firms	5,000/-	10,000/-
LLPs and Body Corporate	50,000/-	5,00,000/-
Proxy Advisers	5,000/-	10,000/-

6. What is the process of filing Research Analyst Registration with SEBI?

Application filing with SEBI is an online process.

Below are the steps of filing an application on the online portal i.e. https://siportal.sebi.gov.in/

On the portal, go to Self- Registration, fill the initial form and pay the application fee

After paying the application fee, you will receive an email from SEBI to generate password for the user id provided in the email. The email form SEBI generally takes some time.

Once you have generated the password, you need to login and fill the form.

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PS: We tried to cover all the generic aspects related to the Research Analyst Registration. For any query you can connect to us at +91 98197 28359 or email your queries at [email protected]