Particulars Brief Description Regulation Reference

Memorandum of Association The Object Clause of our MoA permits carrying out the business of research ---
(MoA) analyst.

Research Analyst (RA) If the Company plans to prepare/ publish/ provide research reports or making Reg. 2(1)(u), 2(1)(v) read
registration certificate from buy/ sell recommendations or giving price targets or offering an opinion with Reg. 3(1)
SEBI concerning public offer with respect to securities that are listed or to be listed,
the Company will require RA Registration from SEBI

Services under RA The services under RA activities are provided by following means: Reg. 2(1)(w)
1. Research Report or
2. Recommendations or
3. Opinion

If the Company plans not to get registered as an RA, it may provide facts but
must refrain from providing opinion on those facts. The Company can simply
supply information to the users and allow them to draw an inference and reach
a decision. The Company may provide a summary of data which is publicly
available or comment on macro and microeconomic factors,
without making any inference or giving an opinion

Issuance of research report by Actionable: Such a person shall enter into an agreement with the research Reg. 4
a person located outside India entity registered under the RA Regulations.

If any LGT Group entity issues such a report in respect of securities listed or
proposed to be listed, an agreement with the Company must be entered into.

Qualification and certification Individuals employed as research analysts shall have minimum qualifications Reg. 7(1) & 7(2)
requirement as specified in Reg. 7(1)

In furtherance, they must also have the certification as specified in Reg. 7(2)-
NISM certification for research analysts as specified by the Board.
Note: A fresh certification must be obtained before expiry of the validity of
the existing certification to ensure continuity in compliance with certification
requirements.
 Actionable: Check and collate all the educational qualification proofs and
NISM Certificate. Send a reminder to the employee before the NISM
Certificate expires.

Capital Adequacy The Company shall have a net worth of not less than twenty-five lakh rupees. Reg. 8(2)
The Net worth certificate should not be more than 6 months old at the time of
filing of application.

Actionable: Check compliance of net worth

Correspondences with Clients Actionable: RA shall use the words "Research Analyst" in all correspondence Reg. 13
with its clients.

Establishing Internal policies The Company shall have written internal policies and control procedures Reg. 15
and procedures. governing the dealing and trading by any research analyst.

Such policies shall address actual or potential conflict of interest, promote

objective and reliable research having an unbiased view of the research analyst
and preventing the use of such report to manipulate the securities market.
The Company shall also have mechanisms to ensure independence of its research
activities from its other business activities.

Actionable: Establish policies and ensure that RA activities are separate from
PMS and other business carried out by the Company,

Limitations on trading by Personal trading activities of the individuals employed as research analyst by Reg. 16
research analysts research entity shall be monitored, recorded and wherever necessary, shall be
subject to a formal approval process.

Research analyst or his associate shall not deal or trade any securities that the
research analyst recommends or follows within 30 days before and 5 days after
the publication of a research report on the subject company. Research analyst or
his associate shall not deal or trade directly or indirectly any securities that he
reviews in a manner contrary to his outstanding recommendation

The limitations on are not applicable to a research entity or its associates if such
research entity has segregated its research activities from all other activities and
maintained arms-length relationship between such activities.
 Restrictions to trade or deal in securities may not apply in case of significant news
or event concerning the subject company or based upon an unanticipated
significant change in the personal financial circumstances of the research analyst,
subject to prior written approval as per the terms specified in the approved
internal policies and procedures.

Monitoring the personal Research entities who employ individuals as research analysts are required to Reg. 16
trading activities of the monitor and record the personal trading activities of the individuals employed as
individuals research analyst with them.
employed as research analysts
Actionable: Ongoing monitoring of the personal account trading of the
research analyst employed by the Company.

Compensation of RA An individual employed as research analyst by research entity shall not be subject Reg. 17
to the supervision or control of any employee of the merchant banking (MB) or
investment banking (IB) or brokerage services divisions of that research entity.

Research entity shall not pay any bonus, salary, or other form of compensation to
any individual employed as research analyst that is determined or based on any
specific merchant banking or investment banking or brokerage services
transaction.

Compensation to RA shall be independent to IB, MB and broking services and

must be reviewed, documented, and approved by the Board/ Committee appointed
by the Board, annually. (Board Resolution will be required).

Actionable: Board Resolution to be passed.

Limitations on publication of RA shall have adequate documentary evidence for preparing a research report. Reg. 18
research report, public RA shall not provide any assurance of favourable review in its research report or
appearance and conduct of influence a business relationship for the receipt of compensation or other benefits.
business, etc. RE shall not issue research reports which are not consistent with the views of RAs
employed by the RE.
RE shall ensure that the RA are separate from employees who perform sales
trading, dealing or any other activity that may affect the independence of its
research report.

Disclosures and Contents in RA/RE shall take steps to ensure that facts in the research reports are based on Reg. 19 & 20
Research Report reliable information and shall define the terms used in making recommendations
 and these terms shall be consistently used.

Rating system if used in the reports, must be defined which shall include time
horizon and benchmark.

In case of reports containing rating and price targets for a particular company's
securities then graph of daily closing price of such securities must be given.

Compliance Officer Compliance officer shall be responsible for monitoring the compliance in respect Reg. 26
of the requirements of the Act, regulations, notifications, guidelines, instructions
issued by SEBI.

The existing compliance officer of intermediary can be appointed as a compliance

officer of a research entity under RA Regulations.

Actionable: May consider including appointment of Compliance Officer in

the Board Resolution.

Maintenance of Records Maintain the following records: Reg. 25(1) and (2)
(i) research report duly signed and dated.
(ii) research recommendation provided.
(iii) rationale for arriving at research recommendation.
(iv) record of public appearance.

Actionable: Preserve records for minimum 5 years and if maintained

electronically, then such records are to be digitally signed.

Annual Audit By member of ICAI or ICSI. Reg. 25(3)

Actionable: No deadline specified in the Regulations. However, it will be good

governance to get the audit done within 6 months of the end of the FY. Consider
passing Board Resolution for appointing auditor.

Fees Application shall be made in Form A along with non- refundable fees of ₹ Second Schedule- Fees
50,000 and at the time of grant of certificate, a registration fee of ₹ 5,00,000.
To keep the certificate valid, the Company shall pay ₹ 5,00,000 every 5 years
from the date of grant of certificate, within three months before expiry of the
period for which fee has been paid.