SEBI Research Analyst | Research Analyst Registration

Eligibility Criteria for Research Analyst Registration under SEBI

To become a SEBI Registered Research Analyst, it is essential to meet the eligibility conditions laid down under the SEBI (Research Analyst) Regulations, 2014. These regulations ensure that only qualified, competent, and financially sound individuals or entities are permitted to offer research analysis services to investors. This helps maintain the integrity, reliability, and professionalism in the securities market. The eligibility requirements broadly fall under two main categories – Qualification & Certification Requirements and Capital Adequacy Requirements. Let’s understand both in detail.

Qualification & Certification Requirements

The first and most important criterion for SEBI Research Analyst Registration is academic and professional qualification. SEBI mandates that any individual or employee/partner of an entity intending to register as a Research Analyst must possess relevant educational credentials in finance or related fields. A person must have a postgraduate degree or diploma in disciplines such as Business Management, Finance, Economics, Commerce, Capital Markets, or Financial Services. This qualification should be obtained from a university or institute recognized by the Central or State Government, or from an internationally recognized institution or association.

Alternatively, the qualification can be one that is accredited by national bodies such as the All India Council for Technical Education (AICTE), National Assessment and Accreditation Council (NAAC), or the National Board of Accreditation (NBA). These are Indian statutory bodies responsible for maintaining academic standards in technical and higher education. Additionally, institutions or councils set up under an Act of Parliament in India are also acceptable for academic recognition.

For those who do not hold a formal postgraduate degree or diploma, SEBI also allows registration if the applicant is a graduate in any discipline but possesses a minimum of five years of relevant work experience in the field of financial products, securities, asset management, fund management, or portfolio advisory services. This experience must be well documented and verifiable through experience certificates issued by the previous employer(s).

Apart from the academic qualification, the applicant is also required to possess a valid NISM Research Analyst Certification. This certification is a mandatory requirement and is governed by SEBI. The relevant examination is called NISM Series XV: Research Analyst Certification Examination, which tests the candidate’s knowledge in equity research, fundamentals, valuation models, ethics, regulatory framework, and other related topics. SEBI may also notify other recognized certifications from time to time in place of or in addition to the NISM certification.

Certain professional qualifications are also considered valid under this criterion. These include degrees such as Chartered Accountant (CA), Company Secretary (CS), Cost Accountant, MBA in Finance, M.Com, Chartered Financial Analyst (CFA), Postgraduate in Banking and Finance, and Master’s in Economics. If an applicant holds any of these degrees and also clears the required NISM certification, they fulfill the educational and certification eligibility under SEBI’s norms.

In the case of non-individuals such as companies or LLPs, it is important to note that the eligibility criteria must be met by the partners or employees who will actually be carrying out the research and analysis. If a director or partner is only involved in the company’s management and not in research-related tasks, then they are not required to meet the qualification criteria.

Capital Adequacy Requirement

The second important criterion for SEBI Research Analyst Registration is related to the financial standing of the applicant, known as capital adequacy. SEBI requires that an applicant should be financially sound to ensure the long-term sustainability and credibility of research services.

For individuals, including proprietorship firms and partnership firms, the net tangible assets should be not less than ?1 lakh. Net tangible assets refer to all tangible assets owned by the applicant such as laptops, residential property, bank balances, fixed deposits, vehicles, stocks, mutual funds, and other financial investments. From this, liabilities such as home loans, car loans, education loans, and other debts must be deducted to arrive at the net figure. A net worth certificate must be obtained from a Chartered Accountant, and it should include the CA’s signature, membership number, and seal.

For LLPs and companies, the minimum net worth requirement is ?25 lakhs. Net worth in this case is calculated as the aggregate value of paid-up share capital and free reserves (excluding revaluation reserves) minus the accumulated losses. If the company (Private Limited Company, Public Limited Company, etc.) or LLP does not currently meet this requirement, it can raise capital by issuing more shares (in the case of companies) or by increasing the capital contribution (in the case of Limited Liability Partnerships). A certified net worth statement by a Chartered Accountant is also required to prove compliance.

Meeting these eligibility criteria is the first step toward becoming a SEBI Registered Research Analyst. It ensures that only qualified and financially stable individuals or entities can carry out research activities that influence public investment decisions in India’s financial markets.