SEBI: Analysts will need professional degree, NISM certificate

SEBI’s new norms for research analysts would require them to have a professional degree as also an NISM or equivalent certification to ensure that investors get the right financial advice.

The National Institute of Securities Markets (NISM) has been established by the Securities and Exchange Board of India (SEBI) to conduct academic programmes and certification examinations for financial education.

The new regulations would require that any individual seeking registration as a ‘Research Analyst, or those engaged in preparation or publication of research analysis and reports have certain minimum qualifications.

These would include a professional qualification, a post-graduate degree or a post-graduate diploma in finance, accountancy, business management, commerce, economics, capital market, financial services or markets.

Such a degree would need to be from a university recognised by the UGC (University Grants Commission) or by an equivalent establishment.

Otherwise, the research analyst can have a professional degree or post-graduate diploma from an institution accredited by All Indian Council for Technical Education, National Assessment and Accreditation Council or National Board of Accreditation, or any other equivalent body.

Those having a graduate degree would need experience of at least five years in activities relating to financial products, markets, securities, funds, asset or portfolio management.

In addition to the professional degree, the research analyst would also need to have, at all times, a NISM Certification Examination for research analysts as specified by SEBI, or any other certification recognised by the regulator board from time to time.

In case of research analysts or research entities already engaged in issuance of research reports, the new regulations require that such individuals obtain a certification within two years from the date of commencement of these regulations.

The new norms have been approved by the SEBI board and are in the process of being notified.

SEBI last week cleared detailed norms for ‘research analysts’ to safeguard investors from any manipulation by such entities and to bring in greater transparency in their activities.

“In India, research analysts were not being regulated. Now we have provided that all people doing research reports will be regulated, there will be a requirement, registration with SEBI and post-registration they will have certain disclosure requirements,” SEBI Chairman U K Sinha had said after a SEBI board meeting on June 19.

COMMENT NOW