Sebi enhances research analyst regulations, releases FAQs for clarity
In a circular released on Wednesday, the capital markets regulator mandated that individuals involved in providing research services must obtain the relevant certification from the National Institute of Securities Markets (NISM) within one year from the date of the circular.
- Jul 24, 2025,
- Updated Jul 24, 2025 2:19 PM IST
The Securities and Exchange Board of India (Sebi) has introduced a series of clarifications and regulatory updates to strengthen compliance and transparency in the research services domain. In a circular released on Wednesday, the capital markets regulator mandated that individuals involved in providing research services must obtain the relevant certification from the National Institute of Securities Markets (NISM) within one year from the date of the circular.
The move aims to ensure that all research-related personnel meet a standard level of qualification, aligning with Sebi's broader goal of enhancing investor protection and market integrity. The regulator clarified that while institutional investors are not required to sign off on the terms and conditions, including the Most Important Terms and Conditions (MITC), research analysts (RAs) and research entities are still expected to share and disclose these terms with such clients.
These decisions were made after extensive feedback from RAs and research entities, with Sebi aiming to ease compliance burdens while providing more transparency. To further assist the industry, Sebi also issued a detailed Frequently Asked Questions (FAQs) document to help research analysts better interpret and comply with existing regulations.
In the FAQs, Sebi clarified what constitutes a "research report." It stated that general market trends, commentaries on economic, political, or market conditions, or discussions on broad-based indices do not fall under the category of research reports. Similarly, periodic reports meant exclusively for unit holders of Mutual Funds or Alternative Investment Funds, or clients of Portfolio Managers and Investment Advisers, are excluded.
Other exclusions include internal communications not shared with current or potential clients, statistical summaries of corporate financials and technical analyses based on demand-supply factors across sectors or indices. These exclusions aim to distinguish opinion-based commentary and internal insights from formal, client-facing research.
Journalists working with media outlets such as newspapers and television channels are not required to register as research analysts. However, if they provide opinions or recommendations on specific securities or public issues, such advice must be backed by research reports from Sebi-registered analysts or other authorised intermediaries.
The circular also outlines the responsibilities of foreign entities. Sebi stated that persons based outside India can issue research reports on securities listed or proposed to be listed on Indian exchanges, but only after entering into a formal agreement with a Sebi-registered research analyst or entity.
To curb potential conflicts of interest, Sebi reinforced trading restrictions for research analysts. Independent analysts, part-time analysts and those employed in research roles are barred from trading in any securities they follow or recommend 30 days before and five days after a report is published. Additionally, they are prohibited from taking positions in a manner contrary to their published recommendations or participating in IPOs of companies operating in sectors they cover.
Commenting on Sebi's move, Shobhit Mathur, Co-founder of Ionic Wealth (by Angel One), said the updated regulations reflect a mature and evolving approach. "As India's HNI segment expands, there's rising demand for premium research and customised advice. Sebi's FAQs help ensure that wealth managers can deliver these services with clear boundaries and no conflict of interest," he said, adding that the framework will enable greater modularity and accessibility for investors through tools like fractionalisation.
These clarifications mark another step in Sebi's ongoing effort to ensure India's capital markets remain robust, investor-friendly and future-ready.
The Securities and Exchange Board of India (Sebi) has introduced a series of clarifications and regulatory updates to strengthen compliance and transparency in the research services domain. In a circular released on Wednesday, the capital markets regulator mandated that individuals involved in providing research services must obtain the relevant certification from the National Institute of Securities Markets (NISM) within one year from the date of the circular.
The move aims to ensure that all research-related personnel meet a standard level of qualification, aligning with Sebi's broader goal of enhancing investor protection and market integrity. The regulator clarified that while institutional investors are not required to sign off on the terms and conditions, including the Most Important Terms and Conditions (MITC), research analysts (RAs) and research entities are still expected to share and disclose these terms with such clients.
These decisions were made after extensive feedback from RAs and research entities, with Sebi aiming to ease compliance burdens while providing more transparency. To further assist the industry, Sebi also issued a detailed Frequently Asked Questions (FAQs) document to help research analysts better interpret and comply with existing regulations.
In the FAQs, Sebi clarified what constitutes a "research report." It stated that general market trends, commentaries on economic, political, or market conditions, or discussions on broad-based indices do not fall under the category of research reports. Similarly, periodic reports meant exclusively for unit holders of Mutual Funds or Alternative Investment Funds, or clients of Portfolio Managers and Investment Advisers, are excluded.
Other exclusions include internal communications not shared with current or potential clients, statistical summaries of corporate financials and technical analyses based on demand-supply factors across sectors or indices. These exclusions aim to distinguish opinion-based commentary and internal insights from formal, client-facing research.
Journalists working with media outlets such as newspapers and television channels are not required to register as research analysts. However, if they provide opinions or recommendations on specific securities or public issues, such advice must be backed by research reports from Sebi-registered analysts or other authorised intermediaries.
The circular also outlines the responsibilities of foreign entities. Sebi stated that persons based outside India can issue research reports on securities listed or proposed to be listed on Indian exchanges, but only after entering into a formal agreement with a Sebi-registered research analyst or entity.
To curb potential conflicts of interest, Sebi reinforced trading restrictions for research analysts. Independent analysts, part-time analysts and those employed in research roles are barred from trading in any securities they follow or recommend 30 days before and five days after a report is published. Additionally, they are prohibited from taking positions in a manner contrary to their published recommendations or participating in IPOs of companies operating in sectors they cover.
Commenting on Sebi's move, Shobhit Mathur, Co-founder of Ionic Wealth (by Angel One), said the updated regulations reflect a mature and evolving approach. "As India's HNI segment expands, there's rising demand for premium research and customised advice. Sebi's FAQs help ensure that wealth managers can deliver these services with clear boundaries and no conflict of interest," he said, adding that the framework will enable greater modularity and accessibility for investors through tools like fractionalisation.
These clarifications mark another step in Sebi's ongoing effort to ensure India's capital markets remain robust, investor-friendly and future-ready.