SEBI Research Analyst Registration

Overview of SEBI Research Analyst

A SEBI research analyst has the qualifications and expertise to provide reliable and accurate recommendations, opinions, and reports on securities. In 2014, SEBI issued a notification regarding the registration and certification required to become a research analyst in India.

Nowadays, the trend of registering a SEBI research analyst is rising daily to formulate a research report for audit, public review, employee, and BOD satisfaction.

Who is a Research Analyst?

Under Regulation 2 (1) (u) of the SEBI (Research Analyst) Regulations of 2014, a research analyst is a person responsible for preparing, providing, or publishing the research report's content on securities. They are also authorized to make, buy, or sell recommendations, give price targets, and offer police officers opinions concerning listed and unlisted securities.

Benefits of SEBI Registered Research Analyst

The applicant entities enjoy the smooth functioning and other benefits of appointing a research analyst for their financial business. The benefits of registering as a research analyst with the Securities Exchange Board of India are as follows-

1. High-Quality Research

The quality of research conducted by the SEBI registered research analysts has high standards for easy assessment and disclosure of risk.

2. Easy Access to Information

SEBI-registered research analysts are authorized to access certain information that is not available in the public domain. This easy access to information helps investors make valuable changes in the financial business.

3. Credible and Qualified

The research analyst registration process includes a rigorous selection of credible and SEBI-qualified research analysts. The registration of credible and qualified research analysts automatically raises the quality bar that SEBI wants to maintain in financial institutions' research reports.

4. Problem-Solving & Analyzing Skills

A research analyst has in-depth knowledge, skills, and understanding of the financial sector's functioning, which assists in analyzing problems arising in the system. This early detection and solution to a problem can make an organization's functioning easy.

5. Assists in Portfolio Management

Next, the SEBI research analyst assists in managing the investment portfolio by conducting proper research and analysis of market security or stocks.

How Does SEBI Research Analyst Make Money?

The SEBI research analyst shall be compensated by the research entity for only the research analyst service that he provides to clients on behalf of the company. However, such research analyst will be only compensated on the analyst services and not for other services like merchant banking, investment banking, or brokerage services that he serves within the same business entity. However, there shall be a clear segregation of these activities.

Eligibility Criteria for SEBI Research Analyst Registration

The SEBI grants the certificate of registration of research analyst only upon fulfilling eligibility criteria specified under Regulation 6 of the SEBI (Research Analyst) Regulations 2014. The following are the eligibility criteria required for the registration of a SEBI research analyst in India:

1. Who Can Apply for SEBI Research Analyst?

An individual, corporate body or limited liability partnership firm is the eligible entity authorized to apply for SEBI research analysts in India. The eligible entities must comply with the minimum qualifications as prescribed under Regulation No. 7 of the SEBI (Research Analyst) Regulations of 2014:

1.1. Educational Qualification

The entities must hold the following educational qualifications as provided below:

• A post-graduate or diploma degree holder accredited by a university or institution recognized by the UGC or any commission of the Parliament of India or
• A post-graduate or diploma degree holder accredited by the Indian Council for Technical Education, National Assessment and Accreditation Council, or National Board of Accreditation; or
• A post-graduate degree holder in the securities market specialization being research analysis from NISM or
• Graduation in any discipline, along with five years of relevant experience in the financial services industry.

1.2. NISM Certification

The next step is to obtain a NISM (National Institute of Securities Market) certificate after passing the NISM Series-Research Analyst Certification Examination.

1.3. Specific Qualifications

Also, the entities holding the following professional qualifications are authorized to apply for SEBI research analyst registration in India:

• A Chartered Accountant registered under ICAI;
• A Company Secretary registered under ICSI;
• A Cost Accountant registered under ICWA;
• A Chartered Financial Analyst;
• A Chartered Marketing Technician;
• A Certified Financial Technician

2. Net Worth Requirement

The individual or corporate legal entity applying for SEBI Research Analyst must hold a net worth requirement as provided in regulation 8 of the SEBI (Research Analyst) Regulations 2013. The following is the capital required to apply for SEBI Research Analyst:

• Net Tangible assets of at least 1 lakh INR (for individuals);
• Net Worth of at least 25 lakhs INR (for companies and LLPs).

3. SEBI Code of Conduct

Also, applicants applying for the SEBI Research Analyst position must duly adhere to the code of conduct for performing research-related activities. The SEBI Code of Conduct, as specified under the 3rd Schedule of the SEBI (Research Analyst) Regulations of 2014, provides for:

• Must be Honest and act in good faith;
• Must be skilled and diligent;
• Must address conflict of interest;
• Must not be engaged in any insider trading or front running;
• Must maintain confidentiality;
• Must adhere to the high professional standards;
• Must comply with the other regulatory requirements.

Documents Required for SEBI Research Analyst Application

The following documents are required to be attached along with the application for research analyst registration with SEBI:

• Identity Proof (PAN, Passport);
• Address Proof (Aadhar Card);
• Qualified Degree Certificate;
• NISM Exam Certificate;
• Regulatory Compliance Declarations;
• Experience Certificate;
• CIBIL score rate;
• Net Worth Certificate from CA (issued within six months);
• last three years Income Tax Return;
• Details regarding infrastructure availability;
• Business Plan;
• Standard Disclosures & Disclaimers;
• Internal Policy Document, etc.

SEBI Research Analyst Registration Process

The SEBI regulations for research analysts set down a detailed procedure of qualifications and eligibility needed to obtain a registration certificate. The process of registering a SEBI research analyst encompasses the following steps:

Step 1: Filing General Information

The applicant must duly fill out all the necessary details, including additional information, in the application Form A. The applicant must also incorporate general information regarding present and past activities in investment and finance.

Step 2: Submission of Application & Supporting Documents

The registration application and supporting documents must be submitted in Form A as provided in the 1st schedule of SEBI (Research Analyst) Regulations of 2014. The application must be submitted at the SEBI head Office, concerned regional office, or any local office.

Step 3: SEBI Background Verification

Next, the SEBI conducts a background verification of the information and documents containing the educational and professional qualifications of the applicants.

Step 4: Reply to Clarifications Raised by SEBI

After conducting the background check, the applicants must reply to any clarifications SEBI raises.

Step 5: Payment of Registration Fees

Next, the applicants must pay the registration fees through bank overdraft to issue the SEBI Research Analyst registration certificate.

Step 6: Grant of Certificate of Registration

Upon being satisfied with the registration requirements and payment of fees, the SEBI grants the certificate of registration to the research analyst (under Dorm B of the 1st Schedule).

Step 7: Renewal of SEBI Research Analyst Registration

Next, the duly granted certificate of registration, which is valid only for 5 years, must be renewed at least 3 months before its expiry date.

Post-Registration Compliances for SEBI Research Analyst

The registered SEBI research analyst must adhere to the post-registration compliances as specified by SEBI occasionally. The following is the list of mandatory post-registration compliances:

1. Compliance Reports

According to the SEBI (Research Analyst) Regulations 2014, the SEBI research analysts must periodically conduct compliance reports to SEBI.

2. Obligations for Research Report

The obligation upon the research analyst is to create an authentic research report that must comprise the following information:

• Must comprise reliable and true information;
• Must define the terms used in making recommendations;
• Must explain the meaning of each rating (for rating systems) and the considerations upon which these ratings are based;
• You must include a graph of daily closing prices for three years.

3. Annual Audit

Regulation 25 (3) authorizes the SEBI research analyst to conduct the annual audit on time with the assistance of a member of the Institute of Chartered Accountants of India or the Institute of Company Secretaries of India.

4. Maintenance of Records

The research analyst must maintain proper records of the duly signed research report, research recommendations, and any other record of public appearance.

5. Update Material Changes

Further, the research analysts must update SEBI regarding any material changes in any information previously provided or in case of misleading or false information.

SEBI Research Analyst Penalty for Non-Compliance

Any SEBI research analyst who fails to function according to SEBI laws and regulations shall be imposed with a legal penalty of not less than one lakh rupees, which may extend to one lakh rupees for each day during which such failure continues, subject to a maximum of rupees one crore.

Recent Updates on SEBI Research Analyst

Recently, SEBI introduced a new framework for dealing with SEBI research analysts in India. The following are the recent updates regulating the Investment Advisors and Research Analyst:

• SBEI ensures the smooth operation of research analyst administration and supervisory body (RAASB);
• SEBI approved the proposal to recognize a stock exchange as RAASB;
• SEBI holds the authority to monitor periodic reports of the SEBI registered Research analysts.

Fees for SEBI Research Analyst Registration

The total amount charged for obtaining SEBI research analyst registration is around Rs.4,00,000/- (Four Lakh).

Timeline for SEBI Research Analyst

Obtaining registration as a research analyst with the Securities Exchange Board of India (SEBI) requires a timeline of 3 to 4 months.

Why Choose Enterslice?

We at Enterslice provide services for the registration of SEBI research analysts. Given below is the list of services our expert professionals help:

1. Assistance with the Registration Process

Enterslice has a team of experts who help individuals and businesses obtain research analysts' registration from SEBI. They assist from finding the eligibility criteria to the regulatory procedures to the issuing of SEBI research analyst registration.

2. Contract Management

Enterslice and its team of contract managers ensure that the contracts are customized according to the SEBI regulations. We also curate and review party-specific and investment-domain contracts for both the investor and the investment company.

3. One-Stop Services

Enterslice could be a one-stop solution for your insurance management-related advisory needs.

4. SEBI Annual Compliance Audit Assistance

We at Enterslice assist in conducting quarterly audits and surveys to assess risk in a stipulated time frame.

5. Legal and regulatory support

Enterslice has a specialized legal team that ensures the dedicated and easy interpretation and understanding of the legal terminologies under the SEBI regulations. Our team ensures that you receive the best market legal and regulatory support for SEBI laws, rules, regulations, circulars, and notifications.

6. Data-Backed Actionable Research Ideas

Our team of expert research advisors can help customize a data creation plan to thoroughly analyze the data's outcomes and generate actionable insights for your business.

7. Stocks Portfolio Research

We provide for the registration of SEBI research analysts in consonance with the market trends and the latest information about the dynamics of stocks and funds. Further, we analyze the company's quarterly results to create and review accurate data and charts.

8. Designing Quarterly and Annual Research Reports

Our expert research analysts formulate an equity research report to provide detailed insight into the investor's buying, holding, or selling capacity. The quarterly and annual reports are also available in the public domain. These reports require due diligence and must be curated by an expert.

9. Explore Future Investment Possibilities

We guide you through the future possibilities of your investments. This will make the belief of current investors strong in the business and will attract new investors for future investments.