Before September 2014 anyone in India could publish a 'buy' or 'sell' call on a listed stock with no oversight at all. The SEBI (Research Analysts) Regulations, 2014 closed that gap by treating the producer of investment research as a market intermediary in its own right — one who must register, qualify, manage conflicts and disclose them. Notified on 1 September 2014 under sections 30 and 11(2)(b) of the SEBI Act, 1992 and brought into force ninety days later, the framework sits beside the SEBI (Investment Advisers) Regulations, 2013 as the second pillar of India's advice-and-research regime. A decade on, the December 2024 third amendment has rewired it again — swapping net worth for graded bank deposits, permitting part-time analysts and routing administration through a new body housed in BSE. This chapter walks through the definitions, the registration architecture, the conflict-of-interest code and the 2024 overhaul, the way an examiner expects you to reproduce it.
Why a separate code for research, and where it comes from
The Regulations open with a recital of their source of power: notification No. LAD-NRO/GN/2014-15/07/1414, made in exercise of the power conferred by sub-section (1) of section 30 read with clause (b) of sub-section (2) of section 11 of the Securities and Exchange Board of India Act, 1992. Section 11(2)(b) lets the Board register and regulate intermediaries; section 30 is the general rule-making power. The stated object is “to put in place a framework to register and regulate research analysts.”
The mischief was real. Sell-side research had long been produced inside brokerages and investment banks whose other divisions earned fees from the very companies the research covered. Globally this conflict had already produced the 2003 US Global Research Analyst Settlement. In India there was no registration requirement at all for the analyst, only for the broker or merchant banker employing him. SEBI therefore borrowed the intermediary template it had perfected for brokers and merchant bankers — the same template you will recognise from the common framework under the Intermediaries Regulations, 2008 — and applied it to whoever is “primarily responsible” for a research call. The continuity is explicit: Regulation 2 imports the definition of “associate” from the Intermediaries Regulations, and Regulation 6 imports their Schedule II fit-and-proper test.
Who is a 'research analyst'? — Regulation 2(1)(u)
The pivotal definition is Regulation 2(1)(u). A “research analyst” means a person who is primarily responsible for (i) preparation or publication of the content of the research report; (ii) providing research report; (iii) making a ‘buy/sell/hold’ recommendation; (iv) giving a price target; or (v) offering an opinion concerning a public offer — with respect to securities that are listed or to be listed on a stock exchange, whether or not the person carries the job title ‘research analyst’, and including any other entities engaged in issuance of a research report or research analysis.
Two features matter for exams. First, the definition is function-based, not title-based: the closing words “whether or not any such person has the job title” defeat any attempt to escape by re-labelling oneself an ‘educator’ or ‘influencer’. Second, the Explanation extends the definition to “any associated person who reports directly or indirectly to such a research analyst in connection with” those activities, so a research team is captured collectively. The companion definitions complete the picture: an “independent research analyst” under 2(1)(h) is one “whose only business activity is research analysis or preparation and/or publication of research report”, and a “research entity” under 2(1)(v) is an intermediary already registered with the Board which is also engaged in merchant banking, investment banking or brokerage and which issues research in its own name through employed analysts.
What counts as a 'research report' — and what does not
Regulation 2(1)(w) defines a “research report” as any written or electronic communication that includes research analysis, a research recommendation or an opinion concerning securities or a public offer, providing a basis for an investment decision. The drafting then carves out nine express exclusions, and these carve-outs are a favourite MCQ source: comments on general trends in the securities market; discussions on broad-based indices; commentaries on economic, political or market conditions; periodic reports for unit-holders of a mutual fund, AIF or clients of portfolio managers and investment advisers; purely internal communications not given to clients; offer documents or prospectuses circulated under SEBI regulations; statistical summaries of company financial data; technical analysis relating to demand and supply in a sector or the index; and any other communication the Board may specify.
The line the definition draws is between security-specific, decision-driving opinion (regulated) and generic market colour or pure data (unregulated). A note that says “the Nifty looks toppy” is a commentary on a broad-based index and falls outside; a note that says “buy Reliance, target 3,500” is squarely a research report. Related definitions sharpen this: “price target” (2(1)(o)) is the analyst's expectation of future performance of specific securities, “public appearance” (2(1)(q)) covers conference calls, seminars, TV, internet and print where a recommendation is made, and “third party research report” (2(1)(zb)) is one produced by someone other than the analyst or entity — relevant later for distribution duties.
The registration trigger — Regulation 3
Regulation 3(1) is the operative prohibition: “on and from the commencement of these 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 the Board.” Transitional provisos allowed an existing analyst six months to continue, or until disposal of an application made within that window. A second proviso exempts an investment adviser, credit rating agency, asset management company or fund manager who issues or distributes research, or whose director or employee makes a public appearance — they need not seek registration under Regulation 3, but remain subject to the Chapter III conduct code. The application is made in Form A of the First Schedule with the fee in the Second Schedule (Regulation 3(2)).
The registration requirement dovetails with section 12(1) of the SEBI Act, which forbids any intermediary from carrying on its business without registration. SEBI's enforcement against unregistered “tip” operators leans on both limbs together: in a string of orders against Telegram and social-media channels peddling paid ‘buy/sell’ calls, the Board has held the operators to have acted as research analysts (and often investment advisers) for consideration without registration, contravening section 12(1) read with Regulation 3, and directed disgorgement of fees collected, refunds to subscribers and market debarment. Regulation 4 adds an extra-territorial hook — a person located outside India issuing research on Indian-listed securities must enter into an agreement with a registered analyst or entity here.
Consideration of the application and fit-and-proper — Regulations 5 and 6
Regulation 5 lets the Board seek further information or clarification and require personal representation. Regulation 6 lists the matters the Board takes into account: whether the applicant is an individual, body corporate, partnership firm or LLP; whether the individual (or, for a body corporate/firm/entity, the employed analysts and partners) are qualified and certified under Regulation 7; whether capital adequacy under Regulation 8 is met; whether the applicant, its employed analysts and partners are “fit and proper” on the criteria in Schedule II of the SEBI (Intermediaries) Regulations, 2008; whether there is adequate infrastructure; and whether the applicant or a connected person has previously been refused a certificate or faced disciplinary action.
The express incorporation of the Intermediaries Regulations 2008 fit-and-proper test is the doctrinal bridge to the wider intermediary jurisprudence: the same integrity, financial-soundness and absence-of-conviction standards that govern a stock broker or merchant banker apply here. A research analyst is, in SEBI's scheme, simply another fit-and-proper-tested intermediary, and the gatekeeping logic is identical.
Qualification and certification — Regulation 7
Regulation 7(1) prescribes the minimum qualification, to be held “at all times” by a registered individual analyst, employed analysts and partners engaged in preparing or publishing research. The 2014 text offered three routes: (i) a professional qualification, post-graduate degree or post-graduate diploma in finance, accountancy, business management, commerce, economics, capital market, financial services or markets from a UGC-recognised university or affiliated institute, a government-established institute, or an autonomous institute under the Government of India; (ii) a professional qualification or post-graduate degree/diploma accredited by AICTE, NAAC or NBA; or (iii) a graduate in any discipline with at least five years' experience in activities relating to financial products, markets, securities, fund, asset or portfolio management.
Regulation 7(2) layers a certification requirement on top: the individual must hold, at all times, a NISM certification for research analysts (the NISM-Series-XV Research Analyst examination) as specified by the Board, or other recognised certification, with provisos allowing existing analysts a two-year window and requiring fresh certification before expiry of the existing one. The 2024 amendment significantly relaxed Regulation 7 — a graduate degree now suffices and the five-year-experience requirement and the mandatory periodic re-examination were eased — but the base NISM certification and the “at all times” standard remain the spine of the qualification regime. The continuing obligation to keep employees and partners certified is reinforced by Regulation 24(5).
Capital adequacy as originally framed — Regulation 8
As notified in 2014, Regulation 8 imposed a modest capital floor. An individual or partnership-firm analyst had to maintain net tangible assets of value not less than one lakh rupees (Regulation 8(1)); a body corporate or LLP had to maintain a net worth of not less than twenty-five lakh rupees (Regulation 8(2)); and existing analysts were given one year to comply (Regulation 8(3)). The Explanation defined “net worth” as the aggregate value of paid-up share capital plus free reserves (excluding revaluation reserves) reduced by accumulated losses — the standard SEBI formulation you also meet in stock-broker capital adequacy.
The figures were deliberately low because research, unlike broking, carries no settlement or counterparty risk — the capital requirement was a seriousness threshold and a source of recovery for penalties, not a prudential buffer. That conceptual point is what the 2024 amendment ultimately acted on, replacing the net-worth idea with a client-linked deposit, discussed below.
Grant, validity, renewal and refusal — Regulations 9 to 13
Once satisfied that the Regulation 6 requirements are met and the registration fee paid, the Board grants a certificate in Form B of the First Schedule, subject to such terms as it deems fit (Regulation 9). The certificate is valid for five years from issue (Regulation 10). A renewal application in Form A may be made three months before expiry and is dealt with as a fresh application (Regulation 11). Where the Board proposes to refuse, Regulation 12 guarantees a reasonable opportunity of being heard, communication of rejection within thirty days, and an immediate cessation of activity on refusal — without prejudice to the applicant's liability under law.
Regulation 13 imposes the standing conditions of the certificate: the analyst must abide by the Act and Regulations; must forthwith inform the Board in writing if previously-submitted particulars are found false or misleading or there is a material change; and must use the term ‘research analyst’ in all correspondence with clients. Regulation 14 empowers the Board to recognise a body or body corporate to administer, supervise and regulate research analysts — the enabling hook later used to create the RAASB. The hearing-before-refusal architecture mirrors the natural-justice safeguards SEBI builds into every intermediary registration; the Supreme Court's broader endorsement of SEBI's regulatory reach in Sahara India Real Estate Corpn. Ltd. v. SEBI, (2012) 10 SCC 603, underlies the legitimacy of this gatekeeping power.
Managing conflicts: internal policies and trading curbs — Regulations 15 to 16
Chapter III is the heart of the Regulations. Regulation 15 requires every analyst or entity to have written internal policies and control procedures governing dealing and trading — addressing actual or potential conflicts arising from trading in the subject company's securities, promoting objective and unbiased research, and preventing use of research to manipulate the market — and to maintain mechanisms ensuring the independence of research from other business activities.
Regulation 16 then imposes hard trading curbs. Personal trading by employed analysts must be monitored, recorded and, where necessary, subject to a formal approval process (16(1)). The blackout rule in 16(2) is the most examined: an independent analyst, an employed analyst or their associates “shall not deal or trade in securities that the research analyst recommends or follows within thirty days before and five days after the publication of a research report.” Sub-regulation (3) bars trading contrary to one's own recommendation; (4) bars buying or receiving pre-IPO securities of an issuer in the same line of business as companies the analyst follows; (5) applies these to a research entity unless it has segregated research and maintained an arm's-length relationship; and (6) carves out trading on significant news/events or an unanticipated change in the analyst's personal financial circumstances, subject to prior written approval. The thirty-days-before / five-days-after window is the single most testable number in the Regulations.
Compensation firewalls and publication blackouts — Regulations 17 to 18
Regulation 17 builds a compensation firewall. A research entity must not pay any bonus, salary or other compensation to an employed analyst that is determined by or based on a specific merchant-banking, investment-banking or brokerage transaction (17(1)); analyst compensation must be reviewed and approved annually by the board or a committee with no representation from those revenue divisions (17(2)); the approving body must not take into account the analyst's contribution to investment-banking or brokerage business (17(3)); and an employed analyst must not be subject to the supervision or control of any employee of those divisions (17(4)). This severs the link between the analyst's pay and the deal flow his research might lubricate — the precise conflict the Regulations were created to defeat.
Regulation 18 imposes publication blackouts where the analyst's firm has an underwriting or managing role. No research, distribution or public appearance on a subject company for which it acted as manager or co-manager within forty days after pricing of an IPO or ten days after a further public offering (18(1)); a participating underwriter must observe a twenty-five-day quiet period (18(2)); a fifteen-day window applies around the expiry of a lock-up agreement (18(3)); and analysts must not be marshalled into solicitation activities such as deal road-shows or sales pitches (18(4) to 18(6)), with an investor-education carve-out. The forty / ten / twenty-five / fifteen day quartet is a recurring numerical MCQ.
The disclosure code — Regulation 19
Regulation 19 is the transparency engine. The analyst or entity must disclose all material information about itself — business activity, disciplinary history, the terms on which it offers research and details of associates. Within the research report and in public appearances it must disclose, on ownership and material conflicts: whether it, its associate or relative has any financial interest in the subject company and its nature; whether they have actual or beneficial ownership of one per cent or more of the subject company's securities at the end of the month immediately preceding publication; and whether any other material conflict exists (19(i)).
On compensation, the report must disclose whether the analyst or its associates received compensation from the subject company in the past twelve months, managed or co-managed a public offering, received investment-banking/brokerage or other compensation, or received any compensation or benefit from the subject company or a third party in connection with the report (19(ii)); a parallel but narrower set applies to public appearances (19(iii)), with a proviso protecting material non-public information about future transactions. The analyst must also disclose having served as officer, director or employee of the subject company, and any market-making activity (19(iv)–(v)). The one-per-cent beneficial-ownership threshold and the twelve-month compensation look-back are the disclosure thresholds to memorise.
Report contents, media recommendations and distribution — Regulations 20 to 22
Regulation 20 governs the substance of the report: facts must rest on reliable information and defined, consistently-used terms (20(1)); any rating system must clearly define each rating's meaning, time horizon and benchmarks (20(2)); and where a rating or price target has been assigned for at least a year, the report must include a graph of daily closing prices for the period assigned or three years, whichever is shorter (20(3)). Regulation 21 addresses recommendations in public media — the analyst, including a director or employee, must disclose registration status and financial interest when making a public appearance, and where a director or employee of an investment adviser, credit rating agency, AMC or fund manager makes a media recommendation, Regulations 16 and 17 apply mutatis mutandis along with name and registration disclosure.
Regulation 22 polices distribution: a report must not be released selectively to internal trading personnel or a favoured client ahead of others entitled to it (22(1)) — the anti-front-running rule; a distributor of third-party research must review it for untrue or misleading statements (22(2)) and disclose the third party's material conflicts or provide a web address to the disclosures (22(3)), unless it has no business relationship with that provider (22(4)). Regulation 23 layers additional disclosure duties on proxy advisers, who are brought within the regime because Regulation 2(1)(p) defines a “proxy adviser” and Regulation 23(1) applies Chapters II to VI to them mutatis mutandis.
General responsibility, records, audit and compliance officer — Regulations 24 to 26
Regulation 24 states the umbrella duties: maintain an arm's-length relationship between research and other activities (24(1)); abide by the Code of Conduct in the Third Schedule (24(2)); obtain prior Board approval for any change in control (24(3)); furnish information and reports as specified (24(4)); and ensure employees and partners stay qualified and certified under Regulation 7 (24(5)). The Third Schedule Code of Conduct prescribes the familiar fiduciary standards — honesty, diligence, no misrepresentation, professional independence and avoidance of conflicts — mirroring the conduct expectations placed on every SEBI intermediary, including those in the stock-brokers' code of conduct.
Regulation 25 requires the analyst to maintain records of the signed and dated research report, the recommendation provided, the rationale for arriving at it, and a record of public appearances, preserved physically or electronically for a minimum of five years (25(2)); records required to be signed and kept electronically must be digitally signed; and an annual compliance audit must be conducted by a member of ICAI or ICSI (25(3)). Regulation 26 obliges every analyst that is a body corporate or LLP to appoint a compliance officer responsible for monitoring compliance with the Act, the Regulations and SEBI circulars. The five-year retention period and the annual CA/CS audit are common exam facts.
Inspection, enforcement and the SEBI Act linkage — Regulations 27 to 29
Chapter IV vests the Board with inspection powers. Under Regulation 27 the Board may, suo motu or on a complaint, appoint an inspecting authority to inspect the books, records and documents of an analyst or entity — to verify record-keeping, investigate complaints, ascertain compliance, or examine the affairs in the interest of the securities market or investors. Regulation 28 requires at least seven days' notice, dispensable in the investors' interest, and Regulation 29 casts a duty on the analyst, entity and associated persons to produce documents and cooperate with the inspecting authority.
Beyond the Regulations themselves, breaches feed into the SEBI Act enforcement machinery: directions under section 11 and 11B, penalties under Chapter VIA, and prosecution under section 24. Because acting as an unregistered analyst contravenes section 12(1) read with Regulation 3, SEBI routinely couples disgorgement of unlawful gains — a power the Supreme Court located within section 11B in SEBI v. Shri Ram Mutual Fund, (2006) 5 SCC 361 (on the strict-liability nature of penalty) and confirmed for disgorgement in subsequent jurisprudence — with debarment. Appeals from such orders lie to the Securities Appellate Tribunal under section 15T, and thence to the Supreme Court on a question of law under section 15Z. For the wider scheme of intermediary registration into which these Regulations slot, see the SEBI Intermediaries Regulations hub.
The 2024 overhaul: deposits, RAASB and part-time analysts
The SEBI (Research Analysts) (Third Amendment) Regulations, 2024, notified in the Official Gazette on 16 December 2024, recast the registration economics. Most significantly, the net-worth requirement in Regulation 8 was replaced by a graded deposit linked to client numbers, operationalised through SEBI circular SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2025/004 dated 8 January 2025. The deposit, maintained as a fixed-deposit receipt with a scheduled commercial bank and marked under lien in favour of the administering body, runs: up to 150 clients — Rs 1,00,000; 151 to 300 clients — Rs 2,00,000; 301 to 1,000 clients — Rs 5,00,000; and more than 1,000 clients — Rs 10,00,000. The deposit creates a recovery pool for investor claims, a more investor-protective device than a static net-worth certificate.
Two further structural changes matter. First, administration, supervision and registration processing have been delegated to a Research Analyst Administration and Supervisory Body (RAASB), a function housed in BSE Limited under the Regulation 14 recognition power — SEBI retains policy and enforcement, but day-to-day administration moves to the RAASB. Second, the amendment expressly permits part-time research analysts, who must meet the same compliance obligations as full-time analysts but may service no more than 75 clients at any time, with a dedicated Form added for their certificate. Qualification norms under Regulation 7 were eased — a graduate degree suffices and the experience and periodic-re-examination requirements were relaxed — reflecting SEBI's stated aim of lowering entry barriers while tightening conduct and investor-recourse safeguards.
Frequently asked questions
Who must register as a research analyst under the 2014 Regulations?
Under Regulation 3(1), any person who acts as a research analyst or research entity, or holds itself out as one, must hold a SEBI certificate. The trigger is functional — Regulation 2(1)(u) catches anyone primarily responsible for preparing or publishing a research report, making a buy/sell/hold call, giving a price target or opining on a public offer for listed or to-be-listed securities, regardless of job title. Investment advisers, credit rating agencies, AMCs and fund managers who merely issue or distribute research are exempted from registering but remain bound by the Chapter III conduct code.
What is the trading blackout window for research analysts?
Regulation 16(2) bars an independent analyst, an employed analyst and their associates from dealing in securities the analyst recommends or follows within thirty days before and five days after the publication of a research report. Regulation 16(3) additionally forbids trading contrary to one's own recommendation, and 16(4) bars receiving pre-IPO securities of an issuer in the same business line as companies the analyst follows. Limited exceptions exist under 16(6) for significant news/events or an unanticipated change in personal circumstances, subject to prior written approval.
What were the capital requirements, and how did 2024 change them?
As originally framed, Regulation 8 required net tangible assets of at least Rs 1,00,000 for an individual or partnership firm, and net worth of at least Rs 25,00,000 for a body corporate or LLP. The 2024 third amendment replaced net worth with a client-linked deposit kept as a bank FDR under lien to the RAASB: Rs 1 lakh up to 150 clients, Rs 2 lakh for 151–300, Rs 5 lakh for 301–1,000, and Rs 10 lakh above 1,000 clients, as set out in SEBI's 8 January 2025 circular.
What qualification and certification must an analyst hold?
Regulation 7(1) requires, at all times, a professional/post-graduate qualification in finance-related fields from a recognised institution, or (originally) a graduate degree with five years' relevant experience. Regulation 7(2) layers on a mandatory NISM certification for research analysts (NISM-Series-XV). The 2024 amendment relaxed Regulation 7 — a graduate degree now suffices and the experience and periodic re-examination requirements were eased — but the base NISM certification, held continuously, remains compulsory.
How does the law treat unregistered stock-tip operators?
Acting as a research analyst for consideration without registration contravenes section 12(1) of the SEBI Act read with Regulation 3. SEBI has acted against numerous Telegram and social-media channels selling paid buy/sell calls, holding them to have functioned as unregistered analysts (and often investment advisers), directing disgorgement and refund of fees collected, imposing penalties and debarring them from the market. The function-based definition in Regulation 2(1)(u) defeats attempts to escape by self-labelling as an 'educator' or 'influencer'.
What records must a research analyst maintain, and for how long?
Regulation 25 requires maintenance of the signed and dated research report, the recommendation provided, the rationale for arriving at it, and a record of public appearances. These must be preserved — physically or electronically (digitally signed where signature is required) — for a minimum of five years. Regulation 25(3) additionally mandates an annual compliance audit by a member of ICAI or ICSI, and Regulation 26 requires a body-corporate or LLP analyst to appoint a compliance officer.