NEW DELHI, Mar 1: Individual investment advisers providing opinion on securities or public offers through TV channels or other media platforms will be required to obtain registration as Research Analysts, regulator Sebi has said.
“Investment advisers who make public appearance or make recommendations or offer an opinion concerning securities or public offers through public media while making recommendations through public media, are required to comply with the relevant provisions of Sebi (Research Analysts) Regulations, 2014,” the capital market regulator said.
Last year, the Securities and Exchange Board of India (Sebi) had ushered in norms for ‘research analysts’, with an aim to safeguard Indian markets from any manipulative research reports including those by foreign entities.
As per the norms, every individual or entity desiring to function as a research analyst would need to get registered after meeting the prescribed criteria, as per a latest ‘FAQ (Frequently Asked Questions)’ note from Sebi.
Individuals including journalists who offer opinion on securities and public issues through media, are also required to obtain registration as research analysts with Sebi.
Investment advice refers to advice on investments in securities or investment products in written, oral or through any other means of communication for the benefit of the client and includes financial planning.
The Sebi further said that members of the Institute of Company Secretaries of India, Institute of Chartered Accountants of India, Institute of Cost and Works Accountants of India who provide investment advice to their clients incidental to their professional services are exempted from obtaining registration as investment advisers.
Citing an exampled, the Sebi said, “an advice by a professional CA as a tax consultant to his tax client for investing in ELSS in the course of tax planning will be treated as incidental to his profession as a tax consultant.”
“However, if they are engaged in providing investment advisory services in securities as an activity or business to clients or investors which is not incidental to their main activity then they are required to get registration as an investment adviser,” it added.
Moreover, corporate advisory services on IPOs, mergers & acquisitions, buyback, takeover, delisting, merchant banking, loan syndication, among others to an issuer or an acquirer are exempted from norms for investment advisers.
At the same time, the regulator observed that a stock broker engaged in providing investment advice to general investors other than or in addition to broking clients is required to get registration as an investment adviser.
In 2013, the Sebi had notified norms that made it mandatory for investment advisers to register with the capital market regulator and also require them to disclose all issues that could result in conflict of interests, among others. (PTI)
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