Research Analysts (RAs) are required to obtain prior approval from RAASB for their advertisements before they are issued. This requirement ensures that advertisements are reviewed for compliance before being published. This article provides a comprehensive technical analysis of the prior approval requirement.
Regulatory Basis
The prior approval requirement is specified in the Advertisement Code circular dated April 5, 2023 (SEBI/HO/MIRSD/MIRSD-PoD-2/P/CIR/2023/51).
The Prior Approval Requirement
What is Required
Prior approval for the advertisement/material shall be obtained from SEBI recognized supervisory body (RAASB) before issue.
Applicability
The requirement applies to:
- All advertisements
- All promotional materials
- All communications that are advertisements
- Research reports that are considered advertisements
Who Must Obtain Approval
- All registered RAs
- Research entities
- Associated entities issuing advertisements where the RA is named
When to Obtain Approval
Timing
- Before the advertisement is issued
- Before the advertisement is published
- Before the advertisement is distributed
Process
- Prepare the advertisement
- Submit to RAASB for review
- RAASB reviews for compliance
- RAASB grants approval
- Advertise
Timeline
The specific timeline for approval is determined by RAASB. RAs should plan ahead to ensure timely approval.
How to Obtain Approval
Step 1: Prepare the Advertisement
- Ensure all mandatory information is included
- Ensure no prohibited content is included
- Include all required disclaimers
- Prepare the advertisement in the required format
Step 2: Submit to RAASB
- Submit the advertisement to RAASB
- Include all supporting documentation
- Follow the RAASB submission process
Step 3: RAASB Review
- RAASB reviews the advertisement
- RAASB checks for compliance
- RAASB may request changes
Step 4: Address Feedback
- Address any feedback from RAASB
- Make any required changes
- Resubmit if necessary
Step 5: Obtain Approval
- RAASB grants approval
- The advertisement can now be issued
What is Subject to Prior Approval
Advertisements
- All formal advertisements
- Print advertisements
- Digital advertisements
- Social media advertisements
- Email marketing
Promotional Materials
- Brochures
- Pamphlets
- Flyers
- Posters
- Display materials
Communications
- Any communication that is an advertisement
- Communications that are promotional in nature
Research Reports
- Research reports that are considered advertisements
- Reports containing promotional content
What is Not Subject to Prior Approval
- Pure research reports (no promotional content)
- Client-specific communications
- Regulatory communications
- Non-promotional content
Retention of Approved Materials
Requirement
Copy of the advertisement shall be retained by RA for a period of five years in terms of Regulation 25(2) of SEBI (Research Analysts) Regulations, 2014.
What to Retain
- The approved advertisement
- The approval from RAASB
- Any related correspondence
Common Compliance Gaps
1. Not Obtaining Prior Approval
Some RAs issue advertisements without obtaining prior approval.
Solution: Obtain prior approval before issuing advertisements.
2. Delayed Submission
Some RAs submit for approval too late.
Solution: Submit well in advance.
3. Not Addressing Feedback
Some RAs do not address RAASB feedback.
Solution: Address all feedback promptly.
4. Not Retaining Copies
Some RAs do not retain copies of approved advertisements.
Solution: Retain copies for five years.
Conclusion and How Anuj Desai & Associates Can Help
Prior approval from RAASB is a mandatory requirement for RA advertisements.
Anuj Desai & Associates offers specialized services to help RAs comply with the prior approval requirement:
- Review of advertisements before submission
- Assistance with RAASB submission
- Guidance on addressing feedback
- Compliance audit and advisory
Contact us today to ensure your advertisements obtain prior approval. Our team will guide you through the approval process.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Readers are advised to consult qualified professionals for legal and compliance matters. Anuj Desai & Associates is a SEBI compliance consulting firm based in India.