As a SEBI-Registered Research Analyst (RA), adhering to compliance guidelines is not just a requirement but a critical part of ensuring transparency, trust, and professionalism in your services. Below is a detailed compliance checklist that outlines the essential documents, procedures, and practices to follow:
1. SEBI Certificate Display
Ensure your SEBI registration certificate is prominently displayed in your office, ideally in a frame. This demonstrates your authenticity as a SEBI-registered entity.
2. Compliance Officer
- Appoint a Compliance Officer to oversee adherence to regulations.
- This officer can be an independent professional (CS, CA, or CMA) who has cleared the required NISM certification.
3. Disclosure and Disclaimer
- Include comprehensive disclosures and disclaimers in your research reports and recommendations.
- Clearly communicate conflicts of interest, market risks, and limitations of your advice to clients.
4. Investor Charter
- Prepare an Investor Charter outlining your roles, responsibilities, and client rights.
- Display it prominently on your website and office premises.
5. Market Risks Disclosure
Provide clear disclosures on the risks involved in market investments in all client communications and reports.
6. Know Your Client (KYC) and KRA Compliance
- Ensure strict adherence to KYC norms and register client information with a KYC Registration Agency (KRA).
- Maintain up-to-date records of client identification and verification.
7. FIU Compliance
Comply with the regulations of the Financial Intelligence Unit (FIU) to monitor and report suspicious transactions.
8. Anti-Money Laundering (AML) Policy
- Implement and regularly update your Anti-Money Laundering (AML) Policy.
- Train your team to identify and report suspicious activities.
9. Rationale Report
- Maintain a detailed rationale report for all recommendations.
- Document your research and reasoning behind every stock or investment suggestion for compliance and transparency.
10. Half-Yearly Compliance and Annual Audit
- Submit half-yearly compliance reports as required by stock exchanges like BSE.
- Conduct an annual audit to ensure all regulatory requirements are met.
11. Digital Signature
Use a digital signature for signing all reports and communications to enhance security and authenticity.
12. SEBI SCORES Platform
Register and stay updated on the SEBI SCORES platform for managing investor grievances effectively.
13. Grievance Redressal Mechanism
- Maintain a Complaint Table to log and resolve client grievances promptly.
- Update this table regularly and display it on your website or office premises.
14. Online Dispute Resolution (ODR)
Enable Online Dispute Resolution (ODR) to provide clients with an accessible mechanism for resolving disputes.
15. Website Compliance Guide
Ensure your website complies with SEBI regulations, including:
- Displaying the SEBI registration number.
- Publishing disclosures, disclaimers, and the investor charter.
- Including a grievance redressal mechanism and contact details.
16. Advertisement Compliance
- Adhere to SEBI’s guidelines for advertisements and promotional activities.
- Avoid misleading claims or guaranteed returns in any form of communication.
- Conflict of Interest Policy
- Develop and disclose a Conflict of Interest Policy to address and mitigate potential biases in your research.
17. Proper Invoicing
- Issue clear and professional invoices to clients for your services.
- Maintain a record of all transactions for compliance purposes.
18. Software as a Service (SaaS)
Use SaaS-based tools for efficient record maintenance, client communication, and compliance tracking.
19. Advertisement Compliance
Follow all guidelines for marketing and promotional materials, ensuring they are accurate and not misleading.
20. Documentation for Grievance Handling
Prepare a clear and easy-to-follow Complaint Table for logging client complaints and their resolution status.
By adhering to this compliance checklist, SEBI-registered RAs can build credibility and foster trust among clients. Regularly review these requirements to stay updated with regulatory changes and maintain your license in good standing.
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