Persons Associated with Research Services (Sales and Other Non-Core Services)
This domain tests the boundary between a registered research analyst and the sales or non-core staff who support research services. The exam asks you to classify personnel, apply supervision and disclosure rules, and spot conflicts of interest. Only those primarily responsible for the preparation, content, or publication of a research report are research analysts; sales, marketing, distribution, client servicing, and back-office staff are persons associated with research services and do not need separate research analyst registration.
Who is covered
- Employees and agents in sales, marketing, distribution, client servicing, and other non-core functions related to research services.
- They may handle approved research reports but must not prepare, alter, or independently recommend securities.
- The registered research analyst remains responsible for their conduct.
Core compliance rules
- Supervision: the registered research analyst or firm must supervise non-core staff and ensure they do not act as de facto research analysts.
- No independent recommendations: sales staff may distribute an approved report but cannot add personal recommendations or targets.
- Compensation: pay must not be tied to specific recommendations or to transaction volume in recommended securities.
- Confidentiality: non-core staff must not disclose a research report before publication.
- Trading: they must not front-run or trade against the firm's research recommendations.
Worked example
A salesperson tells a client: 'Our research team has a Buy on XYZ Ltd with a target of ₹500; I also think you should buy now before the report is published.' The salesperson did not prepare the report. Reasoning: the salesperson is a person associated with research services, not a research analyst, so no separate registration is required. But the statement is non-compliant because it adds an independent recommendation and leaks pre-publication information. The firm's research analyst must ensure sales staff only distribute the approved report and maintain confidentiality.
Traps
- Treating every employee of a research firm as a research analyst - only those who prepare or publish reports are.
- Assuming sales staff cannot discuss research at all - they can distribute approved reports, but cannot make independent recommendations.
- Overlooking compensation-linked conflicts.
- Forgetting pre-publication confidentiality and trading restrictions.
- Confusing this regime with the investment adviser regime.