Sebi Framework for Stock Exchange Supervision of Research Analysts and Investment Advisers

New Delhi, May 2 (PTI) Markets regulator Sebi on Thursday came out with a framework for administration and supervision of research analysts and investment advisers, whereby a stock exchange can be authorised to oversee and manage such entities.

In a circular, Sebi said a stock exchange should be granted recognition as RAASB (Research Analyst Administration and Supervisory Body) and IAASB (Investment Adviser Administration and Supervisory Body).

"To begin with, in order to ensure efficiency in the system and economies of scale, RAASB and IAASB shall be one and the same stock exchange," it added.

To be recognised as a RAASB and IAASB, a stock exchange must have been operational for at least 15 years, possess a net worth of at least Rs 200 crore, need to have nationwide terminals and investor service centres in 20 cities and provide a grievance redressal mechanism, including online dispute resolution.

The exchange is required to set up the necessary infrastructure and systems for administration and supervision. Further, RAASB and IAASB need to constitute an internal committee to oversee the activities of administration and supervision of research analysts (RAs) and investment advisers (IAs).

Sebi said that RAASB/IAASB have specific responsibilities, including registration, enforcement, and disciplinary actions.

In to provide ease of doing business, ensure smooth operationalisation of RAASB and IAASB framework and prevent disruption for existing RAs and IAs, Sebi said existing RAs/IAs registered with Sebi are deemed to be enlisted with RAASB/IAASB.

In cases, where a person has registration as both RA as well as IA, in the interest of efficiency, a single window clearance of various approvals should be adopted.

After the operationalisation of the new framework, all registered RAs/ IAs need to submit periodic reports to RAASB/ IAASB in the manner specified by Sebi.

Further, Sebi would monitor RAASB and IAASB through periodical reports and inspections regarding the administration and supervision of RAs and IAs.