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The market regulator SEBI published an advertisement code for Research Analysts and Investment Advisers on April 5th 2023. All registered Investment Advisers (IAs) and Research Analysts (RAs) must abide by the advertisement code, according to that circular from the Securities and Exchange Board of India (SEBI). The purpose of the circular is to guarantee compliance with the advertisement code established by SEBI and to strengthen the behaviour of IAs and RAs while publishing any advertisements.
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IAs and RAs must adhere to a code of conduct that is set forth in the Securities and Exchange Board of India (Investment Advisers) Regulations, 2013, and the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. It is mandated that IAs and RAs guarantee compliance with the advertisement code as set forth below when issuing any advertisement in order to strengthen their conduct further.
All materials released by or on behalf of IA/RA, including brochures, research studies, newspaper or television ads, mail, electronic messaging, social media platforms, etc., will be considered advertisements under the new rule.
A person or a company that offers personal financial advice is known as an investment advisor (IA). In order to serve their customer’s best interests, RIAs have a fiduciary duty to provide financial guidance. RIAs are registered with the Securities and Exchange Board of India, which regulates the market.
RIAs create a financial strategy for their investors after considering their objectives, resources, and existing circumstances. Also, they bill clients for their services. The cost of the financial plan is often a flat rate and the ongoing fee for the services they do.
A research analyst is a finance expert that collects, analyses, interprets, and creates research reports on securities, stocks, and other assets. These experts evaluate and analyse records pertaining to stocks, securities, and commodities using their understanding of the consumer market and their proficiency with economic principles. A research analyst primarily works in the financial sector and assists businesses in purchasing, selling, and holding investments and securities, though they are in demand across many industries.
Forms of communication
The advertisement must include the following information/disclosures:
The advertisement shall not include the following:
The guidelines in this circular will take effect from May 1st, 2023. To protect the investor’s interest in the securities market, to encourage the growth of the securities market, and to regulate the securities market, this circular is being issued in reference with the authority given under section 11(1) of the Securities and Exchange Board of India Act (SEBI), 1992.
The purpose of SEBI’s advertisement code for investment advisers and research analysts is to safeguard investors’ interests while fostering the growth and regulation of the securities market. In addition to other compliances and standards, the code specifies rules for all types of communication, information/disclosures, and advertising bans. To maintain honesty and integrity in their interactions with investors, IAs and RAs must ensure that the advertisement code is followed.
Also Read: Why are there Few Registered Investment Advisors in India?
I am a driven and meticulous professional who completed B.Com BL (Hons) from Tamil Nadu Dr. Ambedkar Law University and completed Master of Laws in specialization (Criminal Law with Cyber Crimes). I have extensive experience in Criminal Litigation and want to utilise my legal knowledge in writing also I have proficiency in writing legitimate content with comprehensive research. My core areas of interest are Business Law, Intellectual Property Rights, and Cyber crimes.
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