Sebi to frame new guidelines for research analysts
21 Oct 2013 12:04 AM GMT
To ward off any attempts to manipulate share prices through ‘independent’ reports on stocks and listed companies, Sebi may soon issue a new set of guidelines for research analysts covering Indian markets.
While regulated entities like brokerage firms, investment banks and fund houses are already under Sebi’s ambit for their research reports, the capital markets watchdog is now working on a detailed code of conduct and guidelines to be followed by the ‘independent’ research analysts, a senior official said.
Earlier this year, Sebi notified separate Investment Advisor Regulations, which covers registered individuals and entities providing research and advisory services for a fee.
However, it was felt that a separate code or set of guidelines needs to be prescribed for all kinds of research analysts, the official said.
This would help remove a regulatory gap exploited by the individuals and entities who do not register themselves with Sebi to avoid any action for manipulative actions carried on the basis of research reports published by them on the Indian stock markets and individual shares, he added.
A recommendation was made in this regard late last year by Sebi’s International Advisory Board, which had looked into the role played by various entities as research analysts.
It had suggested framing of a separate code or set of guidelines for research analysts and those recommendations are being examined now for implementation, sources said.
The International Organisation of Securities Commissions has also suggested to Sebi that research analysts need to be subjected to appropriate oversight and regulation.
Among the proposed measures, the analysts could be asked to make extensive disclosures regarding their incentive structure, shareholding pattern, market dealings, and various direct and indirect business interests.
While regulated entities like brokerage firms, investment banks and fund houses are already under Sebi’s ambit for their research reports, the capital markets watchdog is now working on a detailed code of conduct and guidelines to be followed by the ‘independent’ research analysts, a senior official said.
Earlier this year, Sebi notified separate Investment Advisor Regulations, which covers registered individuals and entities providing research and advisory services for a fee.
However, it was felt that a separate code or set of guidelines needs to be prescribed for all kinds of research analysts, the official said.
This would help remove a regulatory gap exploited by the individuals and entities who do not register themselves with Sebi to avoid any action for manipulative actions carried on the basis of research reports published by them on the Indian stock markets and individual shares, he added.
A recommendation was made in this regard late last year by Sebi’s International Advisory Board, which had looked into the role played by various entities as research analysts.
It had suggested framing of a separate code or set of guidelines for research analysts and those recommendations are being examined now for implementation, sources said.
The International Organisation of Securities Commissions has also suggested to Sebi that research analysts need to be subjected to appropriate oversight and regulation.
Among the proposed measures, the analysts could be asked to make extensive disclosures regarding their incentive structure, shareholding pattern, market dealings, and various direct and indirect business interests.
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