New SEBI Research Analyst (RA) Regulations – Key Takeaways from a Research Analyst
Aspirant’s Conversation
In December 2024, SEBI introduced major amendments to the Research Analyst (RA)
Regulations, sparking many questions from market participants. Recently, I had a detailed discussion with a compliance head of a stock broking firm. Here are the key insights from our conversation in a simple, easy-to-understand format.
1. Who is a Research Analyst as per the new regulation?
- Anyone who provides research services for consideration.
- “Research services” include stock recommendations, reports, model portfolios, etc.
2. What is “consideration”?
- Consideration = Any economic benefit, whether in cash or kind.
- It includes direct or indirect benefits.
- Examples:
- Fees received for research.
- Brokerage income.
- Commission from mutual fund distribution.
- Even access to client data for upselling services.
3. No charges = No regulation? Think again!
- Even if you’re not charging for your research reports, but earning brokerage or indirect income, you’re still considered to be receiving " consideration.
- Hence, you must register as a Research Analyst with SEBI.
4. Can shifting research activity to a group company help avoid RA registration?
- No. If your group company earns commission from mutual funds and offers stock research as an add-on benefit, it’s still receiving indirect economic benefit.
- Hence, RA registration is still required.
5. Offering paid & free research under same entity?
- Even if you offer only one paid service, the RA regulations apply to all activities of the entity.
- Compliance is at the entity level, not service level.
6. Who is exempted from RA Registration?
Conclusion
If you are providing any form of research service and earning any kind of benefit (cash or non-
cash), you fall under the purview of SEBI’s RA Regulations. It's better to stay compliant than risk penalties.
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