Portfolio Managers Not Required Registration As Research Analysts To Issue Research Reports

Portfolio managers will not be required to seek registration from capital markets regulator under the research analysts rule for issuing research reports to the public and its employees, Sebi said on Wednesday. 

However, such portfolio managers need to obtain a registration certificate under the Research Analyst (RA) rules for issuing any research report and recommendation of buy, sell or hold of securities to specific clients, it added.

Providing informal guidance to a registered portfolio manager LGT Wealth India, the Securities and Exchange Board of India (Sebi) indicated that its views might differ on a case-to-case basis. 

The clarification came after LGT Wealth India sought informal guidance on whether it can provide buy or sell recommendations and give price targets in respect of securities to clients.  

After looking into submissions, Seb said, "A portfolio manager would be eligible for the exemption from the requirement of registration as a research analyst. However, the exemption from the requirement under... the RA regulations is restricted to the entities who issue research reports/ or circulate/ distribute research reports to the public or its director or employee, who makes a public appearance".

"In order to issue any research report or recommendation to any person identified or selected, the PMS shall need to obtain a certificate of registration in terms of ... the RA regulations," it added.