Hi,
Recently I have read in some blogsregards recent clarifications provided by SEBI (though I still can’t see an authentic link from SEBI):
As per the clarifications provided by SEBI: âAny person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulationsâ
Hi Amit,
Your question made me search for this information on the internet. Ans yes you are correct that a person making a recommendation through public media is not required to obtain registration as a research analyst with SEBI.
SEBI has come with a list of FAQs for the RA Regulations and I’m taking some relevant extracts out below to share with everyone. Here is the link as well:-
There are still certain guidelines and regulations under Section 16 and 17 that need to be kept in mind for making recommendations in a personal capacity. But if I’m not wrong, these guidelines have always been there.
According to me, this should be enough to get the Seniors of VP to open up a bit more. Let’s hope for the best!
"As per the regulations, âresearch analystâ means a person who is primarily responsible for,-
i. preparation or publication of the content of the research report; or
ii. providing research report; or
iii. making ‘buy/sell/hold’ recommendation; or
iv. giving price target; or
v. offering an opinion concerning public offer,
with respect to securities that are listed or to be listed in a stock exchange, whether or not any such person has the job title of ‘research analyst’ and includes any other entities engaged in issuance of research report or research analysis. Explanation.-The term also includes any associated person who reports.
Who is required to make an application to get registration under RA Regulations?
In terms of the RA Regulations, no person shall act as a research analyst or research entity or hold itself out as a research analyst unless he has obtained a certificate of registration from SEBI on and from the commencement of RA Regulations unless an exemption specifically applies. [Ref. Regulation 3(1)]. Independent research analyst or research entity (intermediary) who is engaged in issuance of research report or research analysis is required to make an application for registration under RA Regulations.
Whether the persons making recommendations through public media are required to obtain registration under RA Regulations?
No. Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations. However, whenever they make public appearance or makes a recommendation or offers an opinion concerning securities or public offers through public media, all the provisions of regulations 16 on limitations on trading and 17 on limitations on compensation shall apply mutatis mutandis to him and he shall disclose his name, registration status and details of financial interest in the subject company. Further, if such person is also engaged in preparation and/or publication of research report or research analysis, he or the entity on whose behalf the he is acting as a research analyst, needs to get registered with SEBI. 22.What are the disclosures required for making recommendations in public media? Any person including a director or employee of an investment adviser or credit rating agency or asset management company or fund manager, makes public appearance or makes a recommendation or offers an opinion concerning securities or public offers through public media, all the provisions of regulations 16 on limitations on trading and 17 on limitations on compensation shall apply mutatis mutandis to him and he shall disclose his name, registration status and details of financial interest in the subject company at the time of:
(i) making such recommendation or offering such opinion in personal capacity;
(ii) responding to queries from audiences or journalists in personal capacity; Page 8 of 12
(iii) communicating the research report or substance of the research report through the public media.
"
Excellent step by SEBI, since many companies hold one-to-one calls with analysts creating asymmetry of information between retail investors and institutional. I hope that will stop now.
(Note: Could not find a suitable thread to post this, hence posted here. If one exists, please point me to it so it can be posted there)
