BCAS asked SEBI to clarify RA registration issues like migration, Principal Officer roles, delays, and eligibility, seeking streamlined, consistent regulations.
The Bombay Chartered Accountants’ Society (BCAS) has submitted a representation to the Securities and Exchange Board of India (SEBI) highlighting regulatory and procedural issues in the registration process under the SEBI (Research Analysts) Regulations, 2014.
In its letter, BCAS outlined concerns based on inputs received from Chartered Accountants assisting entities seeking registration as Research Analysts (RAs). The representation was also marked to the Research Analyst Membership Division of BSE, which administers RA registrations.
BCAS raised the absence of a structured migration mechanism for individuals seeking to transition to a corporate or LLP structure. It stated that, unlike the Investment Advisers framework, the RA Regulations do not provide for in-principle approval or a defined transition period.
According to the society, applicants currently need to obtain fresh registration and surrender the existing one, which may lead to disruption in client servicing and uncertainty regarding disclosure of historical track records.
BCAS requested SEBI to consider introducing a formal migration framework with defined transition provisions and disclosure requirements.
The society also sought clarification regarding restrictions on “other employment” of the Principal Officer in non-individual RA entities. It stated that applications have been rejected where the proposed Principal Officer holds directorships or partnership interests in other entities.
BCAS submitted that the term “solely” in the definition of Principal Officer refers to the activities of the Research Analyst entity and does not prohibit the officer from holding non-executive or passive roles elsewhere. It requested SEBI to clarify the scope of permissible roles, subject to disclosure and conflict management safeguards.
BCAS further highlighted delays in processing RA applications following the delegation of administrative functions to BSE.
It noted that applications are currently examined at two stages — first by BSE and then by SEBI — and stated that timelines have increased compared to when SEBI handled registrations directly. The society requested measures to streamline the process.
The representation also addressed the appointment of a common Principal Officer across multiple divisions within an entity. BCAS sought clarification that the same individual may act as Principal Officer for both the Research Analyst division and other divisions, in line with the regulatory definition.
In addition, BCAS referred to investor training programmes that use live market data and vendors providing algorithmic trading strategies. It stated that certain applicants have faced observations that such activities are not expressly covered within the definition of “research services.”
The society requested SEBI to clarify whether entities engaged exclusively in investor training using live data or in offering algorithmic strategies may obtain RA registration, subject to compliance requirements.
BCAS also raised issues relating to eligibility of Authorised Persons registered with stock exchanges and corporate entities whose directors or partners are AMFI-registered mutual fund distributors. It requested SEBI to clarify that such individuals or entities may be granted RA registration, where permitted under the regulations and subject to disclosure norms.
BCAS stated that the issues raised are based on practical challenges faced by prospective applicants and requested SEBI to issue appropriate clarifications or amendments to ensure regulatory consistency and operational efficiency.
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