Introduction: The Securities and Exchange Board of India (SEBI) has issued a significant notification on April 26th, 2024, introducing amendments to the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. These amendments aim to enhance the regulatory framework governing research analysts in the securities market.
Detailed Analysis: The amendments primarily focus on three key aspects: enlistment with recognized bodies, fee structures, and periodic renewals.
1. Enlistment with Recognized Bodies: The regulations now require research analysts to be enlisted with a recognized body or body corporate. Existing analysts and entities are deemed to be enlisted from the date of recognition of such a body. Additionally, applicants granted certificates after the recognition of the body are also deemed to be enlisted. This provision aims to ensure supervision and adherence to regulatory standards.
2. Fee Structures: Amendments have been made to the fee structures concerning application fees, registration fees, and renewal fees. The Second Schedule outlines the revised fee amounts for individuals, partnership firms, proxy advisory firms, and body corporates, including Limited Liability Partnerships (LLPs). These fees are crucial for maintaining registration and ensuring compliance with regulatory requirements.
3. Periodic Renewals: Research analysts are now required to pay renewal fees every five years to keep their registration in force. The renewal fees vary for different types of entities and must be paid within three months before the expiry of the registration period. This provision emphasizes the importance of ongoing compliance and regulatory oversight.
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SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 26th April 2024
SECURITIES AND EXCHANGE BOARD OF INDIA
(RESEARCH ANALYSTS) (AMENDMENT) REGULATIONS, 2024
No. SEBI/LAD-NRO/GN/2024/170.—In exercise of the powers conferred by sub-section (1) of section 30 read with clause (b) of sub-section (2) of section 11 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India (Research Analysts) Regulations, 2014, namely, –
1. These regulations may be called the Securities and Exchange Board of India (Research Analysts) (Amendment) Regulations, 2024.
2. They shall come into force on the ninetieth day from the date of their publication in the Official Gazette.
3. In the Securities and Exchange Board of India (Research Analysts) Regulations, 2014, –
I. in regulation 6, after clause (x), the following clause shall be inserted, namely,– “(xi) whether the applicant is enlisted with a body or body corporate recognised under regulation 14:
Provided that the existing research analysts and research entities shall be deemed to be enlisted with such a body or body corporate from the date of recognition of such a body or body corporate:
Provided further that the applicant whose application is received before the date of recognition of the body or body corporate as provided under regulation 14 and who is granted the certificate after the date of recognition of such body or body corporate shall also be deemed to be enlisted with such a body or body corporate.”
II. regulation 14 shall be replaced with the following regulation, namely,–
“Recognition of body or body corporate for administration and supervision of research analysts.
14. (1) The Board may recognize a body or body corporate for the purpose of administration and supervision of research analysts to such extent and on such terms and conditions as may be specified by the Board.
(2) The Board may specify that no person shall act as a research analyst unless such a person is enlisted with the recognized body or body corporate and in such an event, the provisions of these regulations and the specified provisions of the bye-laws or articles of such a body or body corporate shall apply to the research analyst.”
III. In the Second Schedule, –
i. paragraph no. 1 shall be substituted with the following paragraph, namely,-
“1. Every applicant shall pay the non-refundable application fee along with the application for grant of the certificate of registration as under:
i. For individuals and partnership firms: ₹ 2,000;
ii. For proxy advisory firms: ₹ 2,000;
iii. For body corporates including Limited Liability Partnerships: ₹ 20,000.”
ii. paragraph no. 2 shall be substituted with the following paragraph, namely,-
“2. Every applicant shall pay registration fee at the time of grant of certificate of registration by the Board as under:
i. For individuals and partnership firms: ₹ 3,000;
ii. For proxy advisory firms: ₹ 3,000;
iii. For body corporates including Limited Liability Partnerships: ₹ 30,000.”
iii. paragraph no. 3 shall be substituted with the following paragraph, namely,-
“3. A research analyst who has been granted a certificate of registration, in order to keep its registration in force, shall pay the following fee every five years, from the date of grant of the certificate of registration or from the date of grant of the certificate of registration prior to the commencement of the Securities and Exchange Board of India (Change in Conditions of Registration of Certain Intermediaries) (Amendment) Regulations, 2016, as the case may be, within three months before the expiry of the period for which fee has been paid by way of direct credit into the bank account through NEFT/RTGS/IMPS or online payment using the SEBI Payment Gateway or any other mode as may be specified by the Board from time to time:
i. For individuals and partnership firms: ₹ 1,000;
ii. For proxy advisory firms: ₹ 1,000;
iii. For body corporates including Limited Liability Partnerships: ₹ 5,000.”
BABITHA RAYUDU, Executive Director
[ADVT.-III/4/Exty./50/2024-25]
Footnotes:
1. The Securities and Exchange Board of India (Research Analysts) Regulations, 2014, were published in the Gazette of India on September 01, 2014 vide No. SEBI/LAD-NRO/GN/2014-15/07/1414.
2. The Securities and Exchange Board of India (Research Analysts) Regulations, 2014 were subsequently amended on, –
a. 8th December, 2016 by the Securities and Exchange Board of India (Change in Conditions of Registration of Certain Intermediaries) (Amendment) Regulations, 2016 vide notification No. SEBI/LAD-NRO/GN/2016-17/023.
b. 17th April, 2020 by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 20200 vide notification No. SEBI/LAD-NRO/GN/2020/10.
c. 16th March, 2021 by the Securities and Exchange Board of India (Research Analysts) (Amendment) Regulations, 2021 vide notification No. SEBI/LAD-NRO/GN/2021/09.
d. August 3, 2021 by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2021 vide notification No. SEBI/LAD-NRO/GN/2021/30.
e. 17th January 2023, by the Securities and Exchange Board of India (Change in Control in Intermediaries) (Amendment) Regulations, 202 vide notification No. SEBI/LAD-NRO/GN/2023/115.
f. February 7, 2023 by the Securities and Exchange Board of India (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2023 vide notification No. SEBI/LAD-NRO/GN/2023/121.
g. 3rd July 2023 by the Securities and Exchange Board of India (Alternative Dispute Resolution Mechanism) (Amendment) Regulations, 2023 vide notification No. SEBI/LAD–NRO/GN/2023/137.
h. 17th August 2023 by the Securities and Exchange Board of India (Facilitation of Grievance Redressal Mechanism) (Amendment) Regulations, 2023 vide notification No. SEBI/LAD-NRO/GN/2023/146.
