Research Reports by Research Analysts (RAs) Are Not Advertisements Unless Promoting RA Services | SEBI

Circular No. SEBI/HO/MIRSD/MIRSD-PoD1/P/CIR/2024/146, Dated: 24.10.2024

Earlier, SEBI vide Circular dated April 5, 2023, and Master Circular for Research Analysts dated May 21, 2024, specified provisions related to the advertisement code to be followed by a Research Analyst (RA) in their advertisements.

SEBI received various queries regarding the applicability of the provisions of the advertisement code to a research report issued by an RA. In this regard, SEBI has clarified that the Research Report and research recommendations of an RA will not be considered advertisements unless anything contained in the research report is in the nature of the promotion of products or services offered by an RA.

This clarification modifies paragraph 8.1 a. ii. of the Master Circular on the advertisement code. Accordingly, the forms of communication to which the advertisement code must apply include pamphlets, circulars, brochures, notices, or any other literature, document, information, or material published or designed for use in any publication or displayed in any electronic, wired, or wireless communication or over any other audio-visual form of communication or in any other manner.

Further, a research report, irrespective of the mode of its dissemination to any investor or prospective investor, must be treated 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.

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