SEBI notifies norms for research analysts

Moneylife Digital Team 02 September 2014

The SEBI norms have provisions in relation to disclosures to be made in research reports, code of conduct, general responsibility and maintenance of records

Market regulator Securities and Exchange Board of India (SEBI) has notified norms for 'research analysts' to ward off any conflict of interest in their activities. Foreign entities acting as research analysts for Indian markets or India-listed companies would need to tie-up with a registered entity in India.

The new norms would be called the SEBI (Research Analysts) Regulations, 2014.

"These regulations shall come into force on the 19th day from the date of their publication in the Official Gazette," SEBI said in a notification.

As per the new norms, every individual or entity desiring to function as a research analyst would need to get registered after meeting the prescribed criteria regarding qualifications, capital adequacy, establishment of internal policies and procedures, firewalls against conflict of interest, sufficient and timely disclosures, among others.

The regulations also provide for penal actions that SEBI can take against erring research analysts. Such actions would include cancellation of registration, debarment, or penalties similar to any other market intermediary.

The new norms seek to register and regulate research analysts as well as those entities that make recommendations related to securities and public offers such as brokerage houses, merchant bankers and proxy advisors.

Investment advisers, credit rating agencies, portfolio managers, asset management companies, fund managers of alternative investment funds or venture capital funds would not be required to be registered under these regulations.

The norms also prescribe limitations on trading by research analysts as well as certain restrictions with regard to publication of research reports and public appearances.

The norms have provisions in relation to disclosures to be made in research reports, code of conduct, general responsibility and maintenance of records.

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MARVELLOUSRESEARCH

1 decade ago

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