Post-Registration Compliances for Research Analysts

Post-Registration Compliances for Research Analysts. Becoming a SEBI-registered Research Analyst (RA) marks a major or key milestone in your professional journey when you are interested in the financial field or market. However, the RA registration process is just the beginning. As a SEBI-registered entity, the post-registration compliance obligations are mandatory to maintain the validity of your registration and establish trust in the financial advisory domain. In this detailed guide, we cover all the mandatory post-registration compliance requirements to make your registration active and for good reputation in the market as this area is all about trust and faith. 
Why Post-Registration Compliance Matters?
Post-registration compliance after RA registration is mandatory for:
-To check all the SEBI regulatory compliances as per SEBI guidelines.
-Building credibility and trust with clients.
-To avoid the penalties or suspension of registration by SEBI.
-Maintain transparency and accountability in financial practices.
How to go for Registration on SCORES Portal?
Timeline: Must apply within one month of SEBI RA registration. The SEBI Complaints Redress System (SCORES) is a platform for lodging and resolving investor grievances. Registration on SCORES is mandatory for all SEBI-registered RAs, this step is to check that your entity is equipped to address investor complaints transparently and efficiently. Learn the Steps to Register on SCORES:
1. Visit the SCORES portal at SEBI SCORES.
2. Create an account using your SEBI registration number and contact details.
3. Provide an authorized email ID for complaint notifications.
4. Submit the required documentation and complete the verification process.
How to Display of Brand Name/Trade Name?
To promote or enhance the transparency, SEBI mandates the prominent display of key details related to your entity on the following mediums:
-Websites or portals.
-Notice boards or display boards.
-Advertisements and publications.
-KYC forms and client agreements.
Details to Display:
-Name of the RA as registered with SEBI.
-Logo of the RA.
-SEBI registration number.
-Full address and contact details of the RA.
-Compliance officer's name and contact information.
-Grievance redressal email ID or contact details.
Moreover, every communication, report, or publication issued by an RA must include the following disclaimer: "Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide assurance of returns to investors."
This disclaimer must be displayed on:
-Websites or portals.
-Reports and correspondence.
-Client agreements and KYC forms.
What would be the Website Disclosures by RA? 
1. Publication of Investor Charter
An investor charter outlines the rights and responsibilities of investors and the obligations of RAs. The charter must be prominently displayed on:
-The RA’s website or portal.
-Mobile applications (if applicable).
2. Disclosure of Investor Complaints
Regular updates on investor complaints must be made public, including:
-Details of investor complaints received and resolved.
-Status updates on complaints by the 7th of the succeeding month.
-A direct link for lodging complaints and access to SEBI SCORES.
Format for Complaints Disclosure:

Month

Opening Complaints

Received

Resolved

Pending

Terms and Conditions of Service for RA
Clear disclosure of service terms is critical to managing client expectations. RAs must:
-Include terms and conditions in research reports.
-Publish the terms on their website or portal.
Key elements include:
-Scope of services offered.
-Limitations of services.
-Fee structure and refund policies.
-Responsibilities and liabilities of both parties.
What is the Compliance Audit for RA?
Frequency: Annually. A compliance audit evaluates compliance check to SEBI RA Regulations and guidelines and audit must be conducted by a member of the:
-Institute of Chartered Accountants of India (ICAI).
-Institute of Company Secretaries of India (ICSI).
Key Audit Areas:
-Maintenance of records.
-Proper disclosures to clients.
-Grievance redressal mechanisms.
What is Maintenance of Records by RA?
RAs are required to maintain specific records for a minimum of five years, either in physical or electronic format. These records include:
1. Research reports with a date and signature.
2. Recommendations and the rationale behind them.
3. Documentation of public appearances.
4. Client communications and agreements.
What is the Compliance with Fiduciary Duties?
As fiduciaries, RAs must act in the best interests of their clients. Key responsibilities include:
-Disclosing potential conflicts of interest.
-Ensuring unbiased and transparent investment advice.
-Avoiding recommendations that are influenced by third-party remuneration.
How to maintain a Grievance Redressal Mechanism?
A robust grievance redressal system allows to check client satisfaction and regulatory compliance time to time and the essential elements include:
-Dedicated contact details for grievance resolution.
-Defined timelines for addressing complaints.
-Escalation mechanisms, including access to SEBI SCORES.
Compliance Calendar LLP will also help Registered Advisors (RAs) in the process of SEBI inspections if any by checking all records are meticulously updated, organized, and readily accessible while fostering full cooperation with SEBI officials. SEBI inspections are conducted periodically to verify compliance with regulatory requirements, including maintaining transparency. Complying to RA post-registration compliance is not merely a SEBI regulatory obligation but also a major step in building trust and credibility within the financial advisory sector by following SEBI guidelines, RAs can increase the transparency, accountability, and professionalism in their operations, strengthening their reputation and client confidence.
FAQs
1. What are the key post-registration compliances for Research Analysts under SEBI regulations?
Ans. Post-registration, Research Analysts (RAs) must adhere to several compliances, including:
-Maintaining updated records of research reports, data, and recommendations for at least five years.
-Conducting periodic reviews of their policies, practices, and procedures.
-Submitting an annual compliance report to SEBI.
-Ensuring their research recommendations are unbiased and free from conflict of interest.
2. What is the frequency for submitting compliance reports to SEBI?
Ans. Research Analysts are required to submit compliance reports annually to SEBI, detailing adherence to the provisions of the SEBI (Research Analyst) Regulations, 2014. This helps SEBI monitor compliance levels.
3. Are there any specific disclosure requirements for Research Analysts in their reports?
Ans. Yes, Research Analysts must disclose:
-Any financial interest or actual/beneficial ownership in the subject company.
-Any material conflict of interest in relation to the subject company.
-Details of compensation received for research services.
-A declaration that the recommendations are unbiased and based on reliable data.
4. What are the record-keeping requirements for Research Analysts?
Ans. Research Analysts must:
-Retain all research reports, data used for analysis, and details of recommendations for at least five years.
-Ensure records are easily accessible for regulatory inspection.
-Keep transaction records of securities analyzed and recommended.
5. Are there any restrictions on trading activities for Research Analysts?
Ans. Yes, Research Analysts and their relatives are prohibited from:
-Trading in securities recommended in their reports within 30 days before or after the publication of the ecommendation.
-Engaging in front-running or insider trading practices.
6. What happens if a Research Analyst fails to comply with SEBI regulations?
Ans. Non-compliance can result in:
-Monetary penalties imposed by SEBI.
-Suspension or cancellation of the RA registration.
-Potential legal proceedings for severe violations.
7. Is it mandatory for Research Analysts to have a compliance officer?
Ans. Yes, Research Analysts are required to appoint a compliance officer to:
-Ensure adherence to SEBI regulations.
-Oversee the implementation of compliance policies and procedures.
-Act as a liaison between the RA and SEBI in matters of regulatory compliance.

Becoming a SEBI-registered Research Analyst (RA) marks a major or key milestone in your professional journey when you are interested in the financial field or market. However, the RA registration process is just the beginning. As a SEBI-registered entity, the post-registration compliance obligations are mandatory to maintain the validity of your registration and establish trust in the financial advisory domain. In this detailed guide, we cover all the mandatory post-registration compliance requirements to make your registration active and for good reputation in the market as this area is all about trust and faith.

Why Post-Registration Compliance Matters?

Post-registration compliance after RA registration is mandatory for:

-To check all the SEBI regulatory compliances as per SEBI guidelines.

-Building credibility and trust with clients.

-To avoid the penalties or suspension of registration by SEBI.

-Maintain transparency and accountability in financial practices.

How to go for Registration on SCORES Portal?

Timeline: Must apply within one month of SEBI RA registration. The SEBI Complaints Redress System (SCORES) is a platform for lodging and resolving investor grievances. Registration on SCORES is mandatory for all SEBI-registered RAs, this step is to check that your entity is equipped to address investor complaints transparently and efficiently. Learn the Steps to Register on SCORES:

1. Visit the SCORES portal at SEBI SCORES.

2. Create an account using your SEBI registration number and contact details.

3. Provide an authorized email ID for complaint notifications.

4. Submit the required documentation and complete the verification process.

How to Display of Brand Name/Trade Name?

To promote or enhance the transparency, SEBI mandates the prominent display of key details related to your entity on the following mediums:

-Websites or portals.

-Notice boards or display boards.

-Advertisements and publications.

-KYC forms and client agreements.

Details to Display:

-Name of the RA as registered with SEBI.

-Logo of the RA.

-SEBI registration number.

-Full address and contact details of the RA.

-Compliance officer's name and contact information.

-Grievance redressal email ID or contact details.

Moreover, every communication, report, or publication issued by an RA must include the following disclaimer: "Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide assurance of returns to investors."

This disclaimer must be displayed on:

-Websites or portals.

-Reports and correspondence.

-Client agreements and KYC forms.

What would be the Website Disclosures by RA?

1. Publication of Investor Charter

An investor charter outlines the rights and responsibilities of investors and the obligations of RAs. The charter must be prominently displayed on:

-The RA’s website or portal.

-Mobile applications (if applicable).

2. Disclosure of Investor Complaints

Regular updates on investor complaints must be made public, including:

-Details of investor complaints received and resolved.

-Status updates on complaints by the 7th of the succeeding month.

-A direct link for lodging complaints and access to SEBI SCORES.

Format for Complaints Disclosure:

Month

Opening Complaints

Received

Resolved

Pending

Terms and Conditions of Service for RA

Clear disclosure of service terms is critical to managing client expectations. RAs must:

-Include terms and conditions in research reports.

-Publish the terms on their website or portal.

Key elements include:

-Scope of services offered.

-Limitations of services.

-Fee structure and refund policies.

-Responsibilities and liabilities of both parties.

What is the Compliance Audit for RA?

Frequency: Annually. A compliance audit evaluates compliance check to SEBI RA Regulations and guidelines and audit must be conducted by a member of the:

-Institute of Chartered Accountants of India (ICAI).

-Institute of Company Secretaries of India (ICSI).

Key Audit Areas:

-Maintenance of records.

-Proper disclosures to clients.

-Grievance redressal mechanisms.

What is Maintenance of Records by RA?

RAs are required to maintain specific records for a minimum of five years, either in physical or electronic format. These records include:

1. Research reports with a date and signature.

2. Recommendations and the rationale behind them.

3. Documentation of public appearances.

4. Client communications and agreements.

What is the Compliance with Fiduciary Duties?

As fiduciaries, RAs must act in the best interests of their clients. Key responsibilities include:

-Disclosing potential conflicts of interest.

-Ensuring unbiased and transparent investment advice.

-Avoiding recommendations that are influenced by third-party remuneration.

How to maintain a Grievance Redressal Mechanism?

A robust grievance redressal system allows to check client satisfaction and regulatory compliance time to time and the essential elements include:

-Dedicated contact details for grievance resolution.

-Defined timelines for addressing complaints.

-Escalation mechanisms, including access to SEBI SCORES.

Compliance Calendar LLP will also help Registered Advisors (RAs) in the process of SEBI inspections if any by checking all records are meticulously updated, organized, and readily accessible while fostering full cooperation with SEBI officials. SEBI inspections are conducted periodically to verify compliance with regulatory requirements, including maintaining transparency. Complying to RA post-registration compliance is not merely a SEBI regulatory obligation but also a major step in building trust and credibility within the financial advisory sector by following SEBI guidelines, RAs can increase the transparency, accountability, and professionalism in their operations, strengthening their reputation and client confidence.

FAQs

1. What are the key post-registration compliances for Research Analysts under SEBI regulations?

Ans. Post-registration, Research Analysts (RAs) must adhere to several compliances, including:

-Maintaining updated records of research reports, data, and recommendations for at least five years.

-Conducting periodic reviews of their policies, practices, and procedures.

-Submitting an annual compliance report to SEBI.

-Ensuring their research recommendations are unbiased and free from conflict of interest.

2. What is the frequency for submitting compliance reports to SEBI?

Ans. Research Analysts are required to submit compliance reports annually to SEBI, detailing adherence to the provisions of the SEBI (Research Analyst) Regulations, 2014. This helps SEBI monitor compliance levels.

3. Are there any specific disclosure requirements for Research Analysts in their reports?

Ans. Yes, Research Analysts must disclose:

-Any financial interest or actual/beneficial ownership in the subject company.

-Any material conflict of interest in relation to the subject company.

-Details of compensation received for research services.

-A declaration that the recommendations are unbiased and based on reliable data.

4. What are the record-keeping requirements for Research Analysts?

Ans. Research Analysts must:

-Retain all research reports, data used for analysis, and details of recommendations for at least five years.

-Ensure records are easily accessible for regulatory inspection.

-Keep transaction records of securities analyzed and recommended.

5. Are there any restrictions on trading activities for Research Analysts?