Stock exchange to administer research analysts: SEBI
The Securities and Exchange Board of India (Sebi) will delegate administrative and supervisory responsibilities of research analysts (RAs) and investment advisors (IAs) to a stock exchange along with many other non-core functions like approval of advertisements and scrutiny of applications.
Once the new norm kicks in, fresh applications for a research analyst will be routed through the stock exchange, and enlistment with the exchange may be a prerequisite for obtaining Sebi registration.
Existing RAs will not be required to re-register with the new administrative body, unlike when the transition for investment advisors was done to the present BSE-owned administrative body.
Sebi at its March board meeting approved recognising a stock exchange as a ‘Research Analyst Administration and Supervisory Body’ (RAASB) and ‘Investment Advisers Administration and Supervisory Body’ (IAASB).
A circular and a notification on these regulations are yet to be issued. The new norms will kick-in only after the changes have been notified.
While enforcement action and penal action will still be issued by the markets regulator, with the new enabling provisions, the delegated stock exchange may issue warnings or refer a matter for enforcement action.
“The other non-core or incidental functions as may be specified by Sebi shall be performed concurrently by Sebi and RAASB. Sebi shall monitor RAASB through periodical reports and inspection regarding activities of RAs,” said the document.
