SEBI proposes body to administer and oversee research analysts

The paper added that the proposed RAASB will not place any additional financial burden on the member RAs.

The capital market regulator Securities and Exchange Board of India (SEBI) has proposed to incorporate a body for the administration and supervision of Research Analysts (RAs).

“The objective of this consultation paper is to seek comments from the public on the proposal for recognition of body corporate for administration and supervision of Research Analysts (‘RAs’) under Securities and Exchange Board of India (Research Analysts) Regulations, 2014 (‘the RA Regulations’),” said the consultation paper released by the Securities and Exchange Board of India (Sebi) on August 22.

“Considering the evolving nature of business of RAs, it is proposed that, on similar lines as IAASB (Investment Adviser Administration and Supervisory Body), SEBI may recognise a body, designated as Research Analyst Administration and Supervisory Body (‘RAASB’), to administer and supervise RAs and thereby extend the framework for administration and supervision to RAs as in the case of IAs (Investment Advisors),” said the paper.

IAASB was set up for the administration and supervision of Investment Advisers (IAs). BSE Administration & Supervision Limited (‘BASL’), a wholly owned subsidiary of BSE Limited, has been granted recognition as IAASB for three years from June 1, 2021.

“Similar to the IA regulations, regulation 14 of the RA Regulations also provides that SEBI can recognise anybody/body corporate for administration and supervision of RAs on such terms and conditions as may be specified by SEBI. It also provides that SEBI may specify that no person shall act as RA unless he is a member of a recognised body/body corporate and in such event, provisions of the RA Regulations and bye-laws or articles of such body/body corporate shall apply mutatis mutandis to such RA,” said the paper.

The paper added that the proposed RAASB will not place any additional financial burden on the member RAs and shall be fee neutral to them. It stated, “The application fee and registration fee as specified presently in the RA Regulations is proposed to be rationalised accordingly.”

It added, “Further, it is proposed to amend regulation 6 of the RA Regulations to provide that membership of RAASB shall be one of the eligibility criteria for consideration of the grant of certificate of registration as RA.”

The comments have to be sent on September 12, 2023.