Sebi Releases New Reporting Guidelines For Research Analysts, Proxy Advisers

The Securities and Exchange Board of India (Sebi) on October 25, 2024 released a new standardised reporting format for research analysts (RAs) and proxy advisers (PAs) for their periodic reporting. This move aims to enhance transparency and accountability within the financial sector. The new guidelines recognise the Research Analyst Administration and Supervisory Body (RAASB) as the authority responsible for supervising RAs, who are required to adhere to specific registration norms. Since PAs are registered under the same regulations, they will also come under RAASB's oversight.

According to the circular, RAs must submit periodic reports to RAASB, while PAs are to report directly to Sebi. These reports must be submitted within 30 days from the last date of the reporting period.

New Guidelines

"RAs/PAs shall submit periodic reports for half-yearly periods ending on September 30 and March 31 of every financial year. The first reporting period shall be a half-yearly period ending on March 31, 2025, and reports thereof shall be required to be submitted by April 30, 2025. Hence, a time of around six months has been provided to RAs and PAs for submission of their first periodic report to give them sufficient time for making necessary arrangements for providing the required data," Sebi said.

The reports will require details such as name, PAN number, registration numbers, official websites, social media handles, advertisements, number of branches, bank accounts for client fees, information about directors or partners, shareholding patterns, and any complaints lodged against them.  Sebi demands details of shareholders having a holding of 10 per cent or more, and details of complaints and advertisements issued. Further, the number of Research Reports published during the period, pending complaints, number of clients etc are also necessary.

In a separate circular, Sebi made provisions for non-individual investment advisors to obtain an annual compliance certificate from any auditor, simplifying the process for adhering to client-level segregation rules. For these advisors, regular periodic reports to IAASB are necessary. "For the subsequent half-yearly periods, IAs shall submit periodic reports within 30 days from the end of the half-yearly period for which details are to be furnished," Sebi said.