SEBI Releases FAQs on Research Analyst Regulations and Compliance Norms [Read Circular]

The FAQs come after SEBI made changes to the Research Analysts Regulations in December 2024. Since then, SEBI received many requests from research analysts asking for more clarity on how to follow the updated rules. To address this, SEBI has prepared detailed FAQs and published them along with the circular.

One of the key updates in the circular is that all persons involved in research services must obtain a relevant certification from NISM (National Institute of Securities Markets) within one year. This rule applies to those who interact with clients and are involved in preparing or presenting research reports.

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The circular also says that institutional clients or Qualified Institutional Buyers (QIBs) do not need to sign the terms and conditions of the research services. Research analysts must still share all the important terms and conditions with them to ensure transparency.

Important FAQs

1. How are Research Analysts regulated in India?

Research Analysts are governed under the SEBI (Research Analysts) Regulations, 2014, which came into effect on December 1, 2014. These regulations cover registration, certification, code of conduct, limitations on trading, disclosure norms, recordkeeping, and inspection procedures.

2. Do individuals employed with a research entity need to be registered separately?

No. Only the research entity needs SEBI registration. However, the individual analysts must meet qualification and certification criteria and follow all rules, especially regarding trading restrictions.

3. Are marketing and clerical staff covered under Research Analyst regulations?

No. Staff involved in clerical, marketing, or support roles who do not interact with clients or perform research work are not covered under RA regulations.

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4. Are technical analysis reports exempt from RA regulations?

No. If the research is on specific securities, it falls under RA regulations even if based on technical analysis. General sectoral or index-based analysis may be exempt.

5. What is the registration process for becoming a Research Analyst?

Applicants must fill Form A on the RAASB portal (run by BSE) and provide required documents. RAASB checks and forwards the application to SEBI for registration approval.

6. Is NISM certification mandatory for those involved in research services?

Yes. All persons associated with research services must obtain relevant NISM certification within one year of the circular date (i.e., by July 23, 2026).

7. Are Research Analysts allowed to trade in securities they cover?

No. Analysts and their associates cannot trade in securities they follow or recommend:

• 30 days before and 5 days after issuing a research report
• They also cannot trade contrary to their own recommendations

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8. Are Institutional Investors or QIBs required to sign research terms and conditions?

No. They are exempt from signing, but RAs must still disclose the terms, including MITC (Most Important Terms and Conditions).

9. Do non-fee-paying clients count toward compliance obligations?

Yes. Even if clients receive research as a bundled service (without direct payment), they are counted as clients for reporting and deposit calculations.

10. Can a Research Analyst also provide distribution services?

Only if the distribution and research activities are:

• On different products, or
• Handled by separate departments or group entities Client-level segregation is not required for institutional clients if a waiver is obtained.

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