**Summary:**
This circular, reference number SEBI/HO/MIRSD/MIRSD_PoD-1/P/CIR/2024/146, issued by the Securities and Exchange Board of India (SEBI) on October 24, 2024, provides clarification regarding the applicability of advertisement code provisions to Research Reports issued by Research Analysts (RAs).
The circular clarifies that a Research Report and research recommendations are not considered advertisements unless the content promotes the RA's products or services. It amends paragraph 8.1 a. ii. of the Master Circular for Research Analysts (dated May 21, 2024, and Circular no. SEBI/HO/MIRSD/MIRSD_PoD-2/CIR/2023/51 dated April 5, 2023) to specify that the advertisement code applies to communications like pamphlets, circulars, brochures, and electronic or audiovisual displays. However, a research report will be construed as advertisement, irrespective of its dissemination mode, if it expressly or impliedly promotes the RA's products or services.
This circular is issued under the powers conferred by Section 11I of the Securities and Exchange Board of India Act, 1992 and Regulation 24(2) of the SEBI Research Analysts Regulations, 2014, to protect investor interests and regulate the securities markets.
The circular is available on the SEBI website (www.sebi.gov.in) under the "Legal Circulars" category. For further information, contact Aradhana Verma, General Manager, at 022-26449633 or aradhana[at]sebi.gov.in.
Key Entities Referenced
Securities and Exchange Board of India (SEBI): The regulatory body issuing the circular and responsible for regulating the securities markets in India.
Research Analysts (RAs): The entities to whom the circular is addressed and whose activities regarding advertisements and research reports are being clarified.
SEBI Research Analysts Regulations, 2014: Regulations governing research analysts, under which the circular is issued.
Securities and Exchange Board of India Act, 1992: The Act of Parliament that established SEBI and grants it regulatory powers.
Master Circular for Research Analysts: A document issued by SEBI that specifies provisions related to advertisement code to be followed by Research Analysts.
Research Report: Document containing research and recommendations of a Research Analyst, subject to the clarification regarding advertisement code.
RAASB: Research Analyst Administration and Supervisory Body
Aradhana Verma: General Manager at SEBI, responsible for issuing the circular.
CIRCULAR
SEBI/HO/MIRSD/MIRSD-PoD1/P/CIR/2024/146 October 24, 2024
To,
All Research Analysts
Research Analyst Administration and Supervisory Body (RAASB)
Madam / Sir,
Sub: Clarification with respect to advertisement code for Research Analysts
(RAs)
1. SEBI, vide Circular no. SEBI/HO/MIRSD/MIRSD-PoD-2/P/CIR/2023/51 dated April
5, 2023 and Master Circular for Research Analysts dated May 21, 2024 (hereinafter
mentioned as ‘Master Circular’), specified provisions related to advertisement code
to be followed by a Research Analyst in their advertisements.
2. SEBI is in receipt of certain queries with respect to applicability of provisions of
advertisement code on a Research Report issued by an RA. In this regard, it is
clarified that Research Report and research recommendations of an RA are
not considered advertisement unless anything contained in the research report
is in the nature of promotion of products or services offered by an RA. Accordingly,
the paragraph 8.1 a. ii. of the Master Circular shall read as under:
“The forms of communications, to which the advertisement code shall be
applicable, shall include pamphlets, circulars, brochures, notices or any other
literature, document, information or material published, or designed for use in
any publication or displays (such as newspaper, magazine, sign
boards/hoardings at any location), in any electronic, wired or wireless
communication (such as electronic mail, text messaging, messaging platforms,
social media platforms, radio, telephone, or in any other form over the internet) or
over any other audio-visual form of communication (such as television, tape
Page 1 of 2recording, video tape recordings, motion pictures) or in any other manner
whatsoever.
Further, a research report, irrespective of the mode of its dissemination to any
investor or prospective investor, shall be construed as an advertisement if anything
contained in the said research report is either expressly or impliedly in the nature
of promotion of products or services offered by an RA.”
3. This circular is issued in exercise of powers conferred under Section 11(1) of
Chapter IV of the Securities and Exchange Board of India Act, 1992 and Regulation
24(2) of the SEBI (Research Analysts) Regulations, 2014, to protect the interests
of investors in securities and to promote the development of, and to regulate the
securities markets.
4. This circular is available on SEBI website at www.sebi.gov.in under the
category: ‘Legal → Circulars’.
Yours faithfully,
Aradhana Verma
General Manager
Tel. No: 022 26449633
aradhanad@sebi.gov.in
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