SEBI (Research Analysts) (Amendment) Regulations 2021: A Guide

The Securities and Exchange Board of India, by way of the powers given under the provisions of section 30 subsection (1), read with section 11 subsection (2) clause (b) of the SEBI Act 1992, has passed a Notification No SEBI/LAD–NRO/GN/2021/09 on 16.03.2021,concerning the SEBI (Research Analysts) (Amendment) Regulations 2021.

Further, these amended rules seek to further amend the provisions of the SEBI (Research Analysts) Regulations 2014 and will come into force from the date of publication in the Official Gazette.

In this blog, we will discuss the notion of SEBI Research Analysts, along with the key amendments bought through the SEBI (Research Analysts) (Amendment) Regulations 2021.

Concept of SEBI Research Analysts

The term SEBI Research Analyst denotes a person or an entity that is engaged in analysing the securities, such as mutual funds, commodity, or stock, and provides recommendation on the buying and selling of the same.

Further, the key duties or responsibilities of a research analyst are as follows:

• Preparation of Research Reports;
• Recommendation on the Buy or Sell of Securities;
• Offer Opinion on the Public Offer of Securities, both Listed and to be Listed;
• Provide Price Target;

Also, it shall be noted that the following are exempted from the registration of SEBI (Research Analysts):

• Investment Adviser;
• Credit Rating Agency (CRA);
• Asset Management Company;
• Fund Manager;

Also, it shall be relevant to state that the fee for registration for Sole Proprietors and Partnership Firms vary from Private Companies and Limited Liability Partnerships, as in the former case, the minimum capital required is Rs 1 Lakh, whereas in the latter case, the same has been increased to Rs 25 Lakhs.

Also, Read: Delivery Default Norms Amended by SEBI

Key Provisions of the SEBI (Research Analysts) (Amendment) Regulations 2021

The key provisions of the SEBI (Research Analysts) (Amendment) Regulations 2021 are as follows:

Insertion in Regulation 7 (1)

It shall be noted that clause (iii) will now be renumbered as (iv), and alsoprior to the clause so renumbered, the following clause will be inserted:

(iii) a professional qualification by finishing a Post Graduate Program in the Securities Markets (Research Analysis) from the NISM of a period not less than one year; or.

Conclusion

In a nutshell,SEBI Research Analyst means an individual or an entity that is involved in analysing the securities, preparation of reports, recommendation on the buy or sell of securities, and in providing a price target.

Further, the SEBI on 16.03.2021, by way of a Notification No.SEBI/LAD–NRO/GN/2021/09 has notified the SEBI (Research Analysts) (Amendment) Regulations 2021. Through these rules, SEBI has increased the ambit of qualification and education criteria for the entities or individuals who seek to become SEBI Research Analysts.

Also, Read: Master Circular on the Surveillance of the Securities Market Notified by SEBI

Official SEBI Notification