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NISM Series XV study materials
NISM Series XV study resources

NISM Series XV: SEBI (Research Analysts) Regulations and Professional Ethics

NISM Series XV · Work through your exam, one topic at a time.

All guide sections

SEBI (Research Analysts) Regulations and Professional Ethics

What is tested

The SEBI (Research Analysts) Regulations, 2014 and the code of conduct - registration conditions, trading restrictions, disclosure and record-keeping.

Registration

  • A person preparing or publishing research reports or recommendations for compensation must be registered with SEBI as a research analyst; the NISM Series XV certification is a mandatory qualification.
  • Registration is granted on application and is valid for five years, then renewable.
  • Registration can be refused, suspended or cancelled for violations.

Conduct rules

  • Independence and objectivity: no pressure from investment banking, broking or issuer relationships to shade a rating.
  • Disclose conflicts: holdings in the recommended security, compensation structure, any mandate with the issuer, and any material conflict.
  • Never guarantee returns; distinguish fact from opinion; state the valuation method and key assumptions.
  • Trading restriction: the research analyst, associates and relatives must not deal in securities that are the subject of a research report for 30 days before and 5 days after publication.
  • Compensation must not be linked to specific recommendations or to investment banking transactions.
  • Maintain records of research reports and the basis for recommendations for at least five years.
  • Do not use or pass on unpublished price sensitive information; insider trading is governed by the PIT Regulations.

Worked example

An analyst is asked by the equity capital markets team to issue an upbeat note on a company two days before a qualified institutions placement. The analyst owns ₹4 lakh of the stock. Three rules bite at once: the 30-day pre-publication trading bar means the holding must be disclosed and no further buying is permitted; the requested timing creates a conflict that must be disclosed, or the mandate refused; and compensation cannot be tied to the placement. The correct action is to decline the timing request, disclose the holding in the report, and let the rating follow the fundamentals.

Traps

Thinking registration is permanent once granted; believing 'hold' is not a recommendation; applying the trading bar only to the analyst and not to associates and relatives; assuming disclosure cures a genuine conflict of interest.