The periodic report for Research Analysts (RAs) requires detailed information about clients and fees, including a breakdown by individual and non-individual categories. This article provides a comprehensive technical analysis of these reporting requirements.
Regulatory Basis
The client and fee details are specified in the periodic reporting format (Table-3) of the circular dated October 25, 2024 (SEBI/HO/MIRSD/MIRSD-PoD1/P/CIR/2024/148).
Client Details Reporting
Client Categories
Individual Clients:
- Resident
- Non-Resident
- FPI
Non-Individual Clients:
- Resident
- Non-Resident
- FPI
Required Information
| Information | Description |
|---|---|
| Number of clients at end of previous half-yearly period | Count as of the end of the previous period |
| Number of clients acquired during the period | New clients onboarded |
| Number of client relationships that ended during the period | Clients who terminated |
| Number of clients at end of the period | Count as of the reporting date |
Client Counting Exemption
"In case, research services are provided as free for all as value added service to clients of other services offered by the entity viz. stock broking, PMS etc., the details sought in Table-3 need not be submitted."
Fee Details Reporting
Fee Categories
Individual Clients:
- Resident
- Non-Resident
- FPI
Non-Individual Clients:
- Resident
- Non-Resident
- FPI
Required Information
| Information | Description |
|---|---|
| Details of fees collected (in Rs.) | Total fees collected from each category |
Reporting Format
Client Details Table
| Particulars | Individual | Non-Individual | Total |
|---|---|---|---|
| Resident | Non-Resident | FPI | Resident |
| Number of clients at end of previous half-yearly period | |||
| Number of clients acquired during the period | |||
| Number of client relationships that ended during the period | |||
| Number of clients at end of the period |
Fee Details Table
| Particulars | Individual | Non-Individual | Total |
|---|---|---|---|
| Resident | Non-Resident | FPI | Resident |
| Details of fees collected (in Rs.) |
Definition of Categories
Resident (Individual)
- Indian citizens residing in India
- Resident individuals as per FEMA
Non-Resident (Individual)
- Indian citizens residing outside India
- Non-resident individuals as per FEMA
- NRIs, OCIs, PIOs
FPI (Individual)
- Foreign Portfolio Investors
- Registered with SEBI as FPI
Resident (Non-Individual)
- Resident companies, LLPs, partnerships, trusts, etc.
Non-Resident (Non-Individual)
- Non-resident companies, LLPs, partnerships, etc.
FPI (Non-Individual)
- Foreign Portfolio Investors (non-individual)
- Registered with SEBI as FPI
Common Compliance Gaps
1. Incorrect Client Categorization
Some RAs categorize clients incorrectly.
Solution: Properly categorize clients.
2. Missing Fee Data
Some RAs do not report fee data.
Solution: Report all fee data.
3. Incomplete Data
Some RAs do not provide complete data.
Solution: Ensure all fields are completed.
4. Incorrect Application of Exemption
Some RAs incorrectly apply the exemption.
Solution: Apply the exemption only when applicable.
Conclusion and How Anuj Desai & Associates Can Help
Client and fee details are essential for regulatory reporting.
Anuj Desai & Associates offers specialized services to help RAs comply with client and fee reporting requirements:
- Review of client data
- Assistance with categorization
- Compliance audit and advisory
Contact us today to ensure your client and fee reporting is accurate. Our team will guide you through the 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.