Regulation 26C - Client level segregation of research services and distribution activities - Securities and Exchange Board of India (Research Analysts) Regulations, 2014

1 [Client level segregation of research services and distribution activities. 26C. (1) An individual research analyst shall not provide distribution services. (2) The family of an individual research analyst shall not provide distribution services to the client to whom research services are being rendered by the individual research analyst and no individual research analyst shall render research services to a client who is receiving distribution services from other family members. (3) A non-individual research analyst or research entity shall have client level segregation at group level for research services and distribution services. Explanation. (i) The same client cannot be offered both research and distribution services within the group of the non-individual entity. (ii) A client can either be receiving research services where no distributor consideration is received at the group level or distribution services where no research services fee is collected from the client at the group level. (iii) Group for this purpose shall mean an entity which is a holding, subsidiary, associate, subsidiary of a holding company to which it is also a subsidiary, an investing company or the venturer of the company as per the provisions of Companies Act, 2013 for nonindividual research analyst or research entity which is a company under the said Act and in any other case, an entity which has a controlling interest or is subject to the controlling interest of a non-individual research analyst. (4) Non-individual research analyst or research entity shall maintain an arm s length relationship between its activities as research analyst and distributor by providing research services through a separately identifiable department or division. (5) Compliance and monitoring process for client segregation at group or family level shall be in accordance with the guidelines specified by the Board. ] **************** NOTES:- 1. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/220 dated 16-12-2024