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TMI BlogGuidelines for Research AnalystsX X X X Extracts X X X X X X X X Extracts X X X X ..... irements for RAs. It is clarified that the revised qualification requirements shall not be required to existing individual RAs, Principal officer of non-individual RAs or research entity, individuals employed as research analysts and partners of research analyst, if any, engaged in providing research services. However, they shall hold NISM certifications and comply with other conditions specified under Regulation 7(3) of the RA Regulations. ii. Deposit requirement: a. As per Regulation 8 of the RA Regulations , a research analyst shall maintain a deposit of such sum, as specified by the SEBI from time to time. The deposit requirements shall be based on the maximum number of clients of RA on any day of the previous financial year, as under: No. of clients Deposit Up to 150 clients ₹ 1 lakh 151 to 300 clients ₹ 2 lakh 301 to 1,000 clients ₹ 5 lakhs 1,001 and above clients ₹ 10 lakhs b. The deposit shall be maintained with a scheduled bank marked as lien in favor of Research Analyst Administration and Supervisory body (RAASB), in the manner and form as may be specified by RAASB. c. The deposit amount may be revised for any change in applicable amount of deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egulation 2(1) (u) read with regulation 7 of RA Regulations , Part-time RAs shall be required to have similar qualification and certification requirements prescribed under RA regulations for full-time RAs. d. Part-time RA shall provide an undertaking stating that it shall maintain arms-length relationship between its activity as RA and other activities and shall ensure that its investment advisory services are clearly segregated from all its other activities at all stages of client engagement. e. Part-time RA shall provide disclaimer prominently (minimum 10 font size) and attracting the attention of the investor while providing their other service/raising invoice related to other business/service that the activity/invoice is related to services not under the purview of SEBI and no complaint can be raised to SEBI for the services rendered therein. f. The part-time RA shall disclose the nature of other activities and shall ensure that there is no conflict of interest between its RA activity and its other business activities or employment. g. For the purpose of providing additional clarity as to whether a person shall or shall not be considered eligible for registration as part-time R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egistration as part-time RA. v. Designation as principal officer : a. Regulation 2(1)(oa) of RA Regulations provides that in case of non-individual research analyst being a partnership firm, one of the partners shall be designated as its principal officer. It further provides that in case no partner of the partnership firm registered as a research analyst has minimum qualification and certification requirements provided under the RA Regulations , it shall apply for registration a research analyst in the form of a limited liability partnership or a body corporate within such time as may be specified by the SEBI. b. Accordingly, a partnership firm registered as a research analyst, where no partner of the firm has the minimum qualification and certification requirements provided under the Regulations, shall apply for registration as a research analyst in the form of a limited liability partnership or a body corporate latest by September 30, 2025. vi. Appointment of an independent professional as Compliance Officer: a. In terms of Regulation 26 of the RA Regulations , a non-individual research analyst may appoint an independent professional who is a member of ICAI or ICSI or ICMAI or m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . RA or research entity shall maintain record of such research report. b. In terms of Regulation 2(1)(u) read with Regulation 2(1)(fa) of RA Regulations , research analyst means a person providing research services for consideration wherein consideration shall include direct or indirect consideration in any form whether from client or otherwise for providing research services. In this regard, it may be clarified that the research services being provided by research analyst or research entity to any of its clients availing its other services as registered intermediary in another capacity shall be considered as research services provided for consideration even though no fee is charged by such research analyst or research entity directly from the client. Illustration : Research services provided by the research entity, who is also registered with SEBI as stock broker, to clients availing its stock broking services are considered as research services for consideration . ix. Fees chargeable to clients by RAs: Regulation 15A of RA Regulations provide that RA shall be entitled to charge fees for providing research services from client including an accredited investor in the manner as spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h to take distribution services will not be eligible for availing research services within the group/family of the RA. b. A new client will be eligible to avail either research services or distribution services within the group/family of RA. However, the option to avail either research services or distribution services shall be made available to such client at the time of on-boarding. c. Client under these guidelines shall include individual client or non-individual client. d. The client shall have discretion to continue holding assets prior to the applicability of this segregation under the existing research/ distribution arrangement. However, the client shall not be forced to liquidate/ switch such existing holdings. e. PAN of each client shall be the control record for identification and client-level segregation. f. In case of an individual client, family of client [ Family of client shall be as per as per Regulation 2 (1)(fc) of the RA regulations ] shall be reckoned as a single client and PAN of all members in family of client would jointly and severally be the control record. However, the same shall not be applicable for nonindividual clients. g. The dependent family members ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch terms and conditions. b. RA or research entity shall ensure that neither any research service is rendered nor any fee is charged until consent is received from the client on the terms and conditions. c. The minimum mandatory terms and conditions to be disclosed by RA or research entity are provided in Annexure-B. d. The terms and conditions shall also include the Most Important Terms and Conditions (MITC) to be disclosed by RAs/research entity as may be specified by SEBI. MITC shall be standardised by industry standards forum (ISF) in consultation with RAASB and SEBI. e. Consent of client to terms and conditions of the services disclosed by RA or research entity may be signed by the client in person or through any other legally acceptable mode including DigiLocker enabled Aadhaar based esignature facility. f. For the existing clients, the RA/research entity shall comply with the requirements by disclosing the aforesaid terms and conditions and obtain their consent latest by June 30, 2025. xiii. KYC Requirements and maintenance of record a. As provided under Regulation 25(1) of RA Regulations, RA or research entity shall follow the KYC procedure for their fee paying clients and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce audit. d. RA/research entity shall publish the status of the compliance audit report on its website and shall also publish the adverse findings of audit, if any, along with the action taken thereof on its website. RA/research entity shall provide the compliance audit report to its clients. e. RA/research entity shall ensure compliance with the additional audit requirements under this clause starting with for audit report of the financial year ending March 31, 2025. xv. Requirement of website and the details on the website In terms of Regulation 19A of RA Regulations , a Research analyst or research entity shall maintain a functional website and shall contain the details as may be specified by SEBI. RA/research entity shall confirm the details of its website to RAASB and compliance with requirements under this clause by June 30, 2025. 3. Applicability The provisions of this circular shall come into effect on the date of this circular unless otherwise mentioned separately under the respective clause(s). 4. This circular is issued in exercise of powers conferred under section 11(1) of the Securities and Exchange Board of India Act, 1992 read with aforesaid regulations of SEBI (Rese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losures, rationale, methodology, launch date, update date and type of model portfolio contained therein. ii. Methodology: Model portfolio report shall define and discuss the framework including underlying universe for stock selection and shall be labelled to indicate the type of underlying universe of securities (such as large caps, mid-caps, multi caps, etc.) or an underlying theme (such as Make in India, Defence, etc.) or a sector (such as Auto, Textile, etc.). Model portfolio report shall define and discuss in detail the methodology for selection of constituent securities in the model portfolio such as fundamental analysis, technical analysis etc. and the parameters therein. iii. Labelling: Model portfolio should be true to label and should be named in a manner which clearly states the type of portfolio being created along with a oneline description of the theme or investment objective of the model portfolio for ease of understanding for all clients. iv. Investment Horizon : Model portfolio report should specify the investment horizon of the model portfolio so that the investor can match that to their investment period. v. Frequency of portfolio review and update: Whether the mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) as specified by SEBI from time to time. 4. Standard Terms of Service: The consent of client shall be taken on the following understanding: I / We have read and understood the terms and conditions applicable to a research analyst as defined under regulation 2(1)(u) of the SEBI (Research Analyst) Regulations, 2014, including the fee structure. I/We are subscribing to the research services for our own benefits and consumption, and any reliance placed on the research report provided by research analyst shall be as per our own judgement and assessment of the conclusions contained in the research report. I/We understand that i. Any investment made based on the recommendations in the research report are subject to market risk. ii. Recommendations in the research report do not provide any assurance of returns. iii. There is no recourse to claim any losses incurred on the investments made based on the recommendations in the research report. Declaration of the RA that: i. It is duly registered with SEBI as an RA pursuant to the SEBI (Research Analysts) Regulations, 2014 and its registration details are: (registration number, registration date); ii. It has registration and qualifications re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... client to the person/employee designated by RA, in this behalf (RA to provide name and e-mail ID of the designated person/employee). The RA shall be responsible to resolve grievances within 7 (seven) business working days or such timelines as may be specified by SEBI under the RA Regulations. RA shall redress grievances of the client in a timely and transparent manner. Any dispute between the RA and his client may be resolved through arbitration or through any other modes or mechanism as specified by SEBI from time to time. 10. Additional clauses: All additional voluntary clauses added by the RA should not be in contravention with rules/ regulations/ circulars of SEBI. Any changes in such voluntary clauses/document(s) shall be preceded by a notice of 15 days. 11. Mandatory notice: Clients shall be requested to go through Do s and Don ts while dealing with RA as specified in SEBI master circular no. SEBI/HO/MIRSD-POD1/P/CIR/2024/49 dated May 21, 2024 or as may be specified by SEBI from time to time. 12. Most Important Terms and Conditions (MITC): RA shall also disclose MITC to their clients which shall be standardised by Industry Standards Forum (ISF) in consultation with SEBI and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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