Market Regulator Brings Analysts Under Regulation – Financial Chronicle – 10-Dec-2014

December 16, 2014 - Uncategorized

The Securities and Exchange Board of India (Sebi) has given out details of research analysts regulation that defines a host of analysts including techanial analyst, proxy advisory firm and even journalist giving stock specific recommendations.

It clarified that a research entity which employs individuals as research analysts is required to obtain registration certificate under RA Regulations. The individuals employed as research analyst by research entity are required to comply with qualification and certification requirements as specified in the regulations.

The RA Regulations have come into effect from December 01. The Sebi has given six months time for existing persons acting as research analyst or research entity to comply with the regulation. It said no person shall act as a research analyst or hold itself out as a research analyst unless he has obtained a certificate of registration from Sebi.

“Intermediaries registered with Sebi who is engaged in merchant banking or investment banking or brokerage services or underwriting services and issue research report or research analysis and other intermediaries to whom there is no specific exemption under RA Regulations are covered under the definition of research entity,” Sebi FAQ on the regulation said.

It said “proxy adviser” who provide advice to institutional investor or shareholder of a company, in relation to exercise of their rights in the company are required to obtain registration from Sebi under RA Regulations. They are required to give various disclosures including details of various voting recommendation. Any persons who makes recommendation or offers an opinion concerning securities or public offers to the general public through any media source available such as radio, television, internet, web or print media are covered under the definition of “public media”.

Journalists employed by various news organisations and who comment on specific stock with proper research, which get published in news paper, etc have to comply with the regulation.

Sebi clarified that investment advisers, credit rating agencies, asset management companies and fund managers are not required to be registered under these regulations.


Financial Chronicle

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