The SEBI Research Analyst glossary

A research analyst is a person who prepares or publishes research reports, provides research analysis, or makes buy, sell or hold recommendations on securities — and is registered with SEBI to do so.

The definition covers the individual writing the report and anyone holding themselves out as an analyst. Registration under the SEBI (Research Analysts) Regulations, 2014 is mandatory.

A research report is any communication — note, email, message, video or post — containing research analysis or a recommendation on a security, that could reasonably be used as the basis for an investment decision.

The format is irrelevant; the substance decides. A message on a channel recommending a stock with a target price is a research report, and publishing it for consideration without registration is a violation.

A research entity is a non-individual research analyst — typically a broking firm or research house — registered in its own name, with individual analysts working under it.

It must appoint a principal officer and a compliance officer, and every employee producing research must meet the qualification and certification requirements individually.

A research analyst issues a view on a security to a readership, without assessing whether it suits any particular reader. An investment adviser knows the client, profiles their risk and recommends what fits them.

The registrations are separate and the obligations differ. Providing personalised, portfolio-level advice under an RA registration is a common and serious compliance failure.

The 2024 amendments created a part-time research analyst category, allowing registration alongside another occupation provided it does not conflict, subject to a client limit and to clear disclosure of the part-time status in every report.

It was introduced to bring independent analysts publishing on social media into the regulated framework rather than leaving them outside it.

The SEBI (Research Analysts) Regulations, 2014 introduced registration for research analysts and set the framework for disclosures, conflict management, trading restrictions and record-keeping.

The 2024 amendments relaxed entry requirements — replacing net worth with a deposit and lowering the qualification bar — while adding a fee ceiling for individual clients, mandatory client documentation and specific rules for model portfolios.

An applicant files Form A through the SEBI intermediary portal with evidence of qualification, valid NISM certification, the prescribed deposit and adequate infrastructure, and applies for membership of the supervisory body.

Registration may be granted to an individual, a research entity or a part-time analyst, and remains valid subject to ongoing compliance.

The minimum qualification is a graduate degree in finance, accountancy, business management, commerce, economics, capital markets, banking, insurance or actuarial science.

This replaced the earlier post-graduate requirement, and the separate requirement of prior experience was removed at the same time.

Research analysts must hold the NISM Series XV research analyst certification, or an accepted equivalent.

The certificate must be renewed before it expires. Every individual who produces research or interacts with clients about it needs their own valid certification — one certified principal does not cover a team.

The 2024 amendments replaced net worth with a deposit maintained with a scheduled bank under a lien in favour of the supervisory body, graded by the number of clients served.

It is available towards satisfying client claims arising from arbitration or a regulatory order, giving investors a more direct remedy than a balance-sheet test provided.

A research entity must designate a principal officer responsible for the research function, who must personally meet the qualification and certification requirements.

Regulatory accountability for the entity’s research output runs through this person.

Anyone involved in preparing research reports or dealing with clients in relation to them is a person associated with research services, and must hold the prescribed qualification and NISM certification in their own right.

Sales staff who merely distribute completed reports without advising on them are treated differently, but the line is narrow.

Research entities must appoint a compliance officer to monitor adherence to the regulations, oversee the disclosure requirements in reports, and maintain the internal controls that keep research separate from other business lines.

The role covers advertisement review, record retention, the annual audit and grievance handling.

A recommendation is the analyst’s conclusion — buy, hold, sell, accumulate, reduce or an equivalent. Every report carrying one must also carry the mandatory disclosures and the rating definitions used.

The rating scale must be defined consistently, and the distribution of ratings across the coverage universe must be disclosed, which shows whether an analyst ever issues a sell.

A target price is the level the analyst expects the security to reach over the stated horizon. The report must set out the valuation methodology used to arrive at it and the risks that could prevent it being reached.

A target price is a projection, not a commitment, and changes to it must be tracked and disclosed alongside the recommendation history.

Every recommendation must state its time horizon — the period over which the view is expected to work, whether a few weeks or several quarters.

Without it a target price is unfalsifiable. The horizon also determines when the recommendation should be reviewed or withdrawn.

Reports must disclose the valuation methodology used — a multiple applied to earnings or book value, a discounted cash flow, a sum of the parts — along with the key assumptions.

Disclosing the method is what makes a target price reviewable rather than a bare assertion.

An initiation is the first report an analyst publishes on a company, usually the most detailed in the sequence, covering the business, industry, financial model and valuation.

Discontinuing coverage must also be communicated, so that clients do not continue to rely on a recommendation no longer being maintained.

The coverage universe is the list of securities the analyst actively follows and maintains ratings on.

Analysts must disclose the distribution of their ratings across it. A universe with no sell recommendations tells a reader something useful about how the ratings should be read.

A model portfolio is a published basket of recommendations with defined weights, rebalanced periodically. SEBI brought these expressly within the RA framework, requiring disclosure of the construction methodology, the rebalancing approach, the costs assumed and the performance since inception.

A model portfolio must remain impersonal. Tailoring one to an individual client’s circumstances crosses into investment advice and needs an IA registration.

Where past performance is presented, it must cover the complete set of recommendations over the stated period, computed on a consistent basis, not a curated selection of winners.

Selective disclosure of profitable calls is one of the most common misleading practices in retail research marketing, and it is expressly prohibited.

Research must be distributed simultaneously to all entitled recipients. Selectively giving a report or a rating change to favoured clients ahead of general release is prohibited.

The same principle bars an analyst or the entity from trading on a recommendation before it reaches clients.

A public appearance — a television interview, a conference, a webinar, a social media broadcast — carries the same disclosure obligations as a written report.

The analyst must disclose holdings in the securities discussed, any compensation relationship with the company, and the fact of their registration. Records of public appearances must be maintained.

The 2024 amendments introduced a fee ceiling for research services provided to individual and HUF clients — 1,51,000 rupees per annum per family of client, aggregated across all research services.

It does not apply to institutional or accredited investors. The ceiling was introduced because subscription pricing in retail research had drifted well beyond what the service could justify.

Fees may be charged as a subscription or a flat amount, within the applicable ceiling. Profit sharing and performance-linked fees are prohibited, as is any arrangement that gives the analyst a stake in the client’s outcomes.

Fee terms must be set out in the client documentation before services begin, and any change requires fresh consent.

Research analysts may collect fees in advance only for the period allowed under the regulations, with refund of the unexpired portion if the engagement is terminated.

The current permitted period should be confirmed against the prevailing circular, since it has been revised more than once.

SEBI requires analysts to provide a standardised Most Important Terms and Conditions document covering the scope of services, fees and refunds, the absence of any guaranteed return, conflicts, and how to complain.

Client acknowledgement must be obtained and retained. It applies to every client, including those onboarded through an app or a subscription page.

Research analysts must complete KYC for clients availing paid research services and upload records to a KYC Registration Agency.

The requirement brought paid research subscriptions into line with other intermediary relationships, and it makes anonymous paid tip services impossible to run within the framework.

Every report must carry the analyst’s registration details, the rating definitions and horizon, the valuation methodology and risks, the analyst’s certification that the views are their own, and disclosures on holdings, compensation and any relationship with the subject company.

The disclosures must be prominent rather than buried, and the same set applies to public appearances and to research shared through messaging or social platforms.

Analysts must disclose whether they, their relatives or their research entity hold any financial interest in the subject company, and whether that holding crosses the prescribed materiality threshold as at the end of the month preceding publication.

Actual or beneficial ownership above the threshold must be stated in the report itself, not merely recorded internally.

Reports must disclose whether the analyst or the research entity received compensation from the subject company in the past twelve months — for investment banking, merchant banking, brokerage services or any other product or service.

Analyst compensation must not be linked to any specific recommendation, or to investment banking revenue from the covered company.

Analysts must identify and manage conflicts of interest: personal holdings, group entity relationships, investment banking mandates, directorships and any consideration received from the subject company.

Where a conflict cannot be adequately managed, the expectation is that the analyst declines to cover the security rather than covering it with a disclosure attached.

A Chinese wall is the set of physical, systems and reporting separations that keep the research function insulated from investment banking, proprietary trading and sales.

Research reports must not be shared with the subject company before publication, except to check facts, and never for a view on the rating or the target price. Investment banking staff cannot review or influence research.

Analysts and their relatives may not deal in a subject security during the blackout windows before and after a report is published, and may never trade contrary to their own recommendation.

Any dealing outside those restrictions must still be disclosed. The rules stop an analyst positioning ahead of a rating change and profiting from the market’s reaction to it.

No analyst may hold out a guaranteed or assured return, in any wording or format. This extends to implied assurances such as accuracy percentages presented as reliability claims.

Any securities market service promising guaranteed profits is either misrepresenting itself or operating outside the framework entirely.

The advertisement code requires promotional material to carry registration details and the standard disclaimer, and prohibits guaranteed returns, exaggerated claims, client testimonials and selectively presented past performance.

Material must go through the supervisory body’s approval process before publication, and records of what was published must be retained.

The Research Analyst Administration and Supervisory Body administers registrations, membership, advertisement approvals, inspections and first-level supervision of research analysts. The BSE was designated to operate it.

Every registered analyst must be a member, and the membership number must appear alongside the SEBI registration number on communications.

Every research analyst must have compliance audited annually by a member of ICAI or ICSI, covering registration conditions, disclosures in reports, conflict management, trading restrictions, fees, client documentation and records.

The report, with the analyst’s response to any adverse findings, must be submitted to the supervisory body within the prescribed period.

Analysts must retain records of every research report, the research and rationale behind each recommendation, public appearances, client communications, KYC and fee particulars for at least five years.

Where a dispute is pending, records must be kept until it concludes. Inspections work from these records, and their absence is treated as if the analysis never took place.

Analysts must display the registration number, the SEBI office address, the RAASB membership number, the compliance officer’s contact details, the complaint escalation matrix and the standard disclaimer that registration does not guarantee performance.

Monthly complaint data must also be published in the prescribed format.

SEBI and the supervisory body may inspect an analyst’s records, systems and published research at any time.

Findings can result in warnings, penalties, restrictions on onboarding clients, suspension or cancellation of registration, and directions to refund fees to clients.

Selling stock recommendations for consideration without registration violates the RA Regulations, and SEBI has acted repeatedly against paid tip groups on messaging and social platforms.

The signals are consistent: guaranteed accuracy claims, screenshots of winning calls only, pressure to pay immediately, no written terms, and no verifiable INH registration number. Verify the number on the SEBI website before subscribing.

Analysts must operate a documented grievance redressal process with a designated officer and resolve complaints within the prescribed timeline.

Unresolved complaints escalate to SEBI’s SCORES platform, which tracks the response and the outcome. Complaint statistics must be published monthly on the analyst’s website.

The securities market online dispute resolution portal offers conciliation and, if that fails, arbitration for disputes between investors and registered intermediaries.

It follows direct complaint and SCORES escalation. An award can be enforced against the analyst, including against the deposit maintained under the registration requirements.

The investor charter for research analysts sets out the services provided, investors’ rights and responsibilities, the do’s and don’ts of dealing with an analyst, and the timelines for each activity including complaint resolution.

It must be displayed on the analyst’s website and brought to clients’ attention at onboarding.