Research Analysts frequently participate in public appearances and media engagements, whether through television interviews, radio broadcasts, print media articles, or social media platforms. The SEBI (Research Analysts) Regulations, 2014 impose specific disclosure requirements that must be complied with during such appearances.
Understanding Public Appearance
Regulation 2(1)(q) of the RA Regulations defines "public appearance" as any participation in a conference call, seminar, forum (including interactive and non-interactive electronic forum), radio or television or internet or web or print media broadcast, authoring a print media article or other public speaking activity in public media in which a research analyst makes a recommendation or offers an opinion concerning securities or public offer.
Exceptions to Public Appearance
The definition of public appearance does not include a password protected webcast, conference call, or such other events with clients, if all of the event participants previously received the research report or other documentation that contains the required applicable disclosures and that the research analyst appearing at the event corrects and updates during the public appearance any disclosures in the research report that are inaccurate, misleading, or no longer applicable.
Disclosure Requirements for RAs
Registration Status Disclosure
Regulation 21(1) of the RA Regulations requires that a research analyst or research entity including its director or employee shall disclose the registration status during public appearance. This means:
- The RA must clearly state that it is registered with SEBI
- The SEBI registration number must be provided
- The registration must be valid and current
Financial Interest Disclosure
The RA must disclose details of financial interest in the subject company during public appearance. This includes:
- Whether the research analyst or research entity or his associate or his relative has any financial interest in the subject company and the nature of such financial interest
- Whether the research analyst or research entity or its associates or relatives have actual/beneficial ownership of one percent or more securities of the subject company
- Whether the research analyst or research entity or his associate or his relative has any other material conflict of interest
Compensation Disclosure
During public appearance, the RA must disclose:
- Whether it or its associates have received any compensation from the subject company in the past twelve months
- Whether the subject company is or was a client during twelve months preceding the date of distribution of the research report and the types of services provided
Application to Other Persons
Regulation 21(2) of the RA Regulations extends disclosure requirements to persons other than RAs. If any person including a director or employee of an investment adviser or credit rating agency or asset management company or fund manager makes a public appearance or makes a recommendation or offers an opinion concerning securities or public offers through public media:
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All provisions of regulation 16 (limitations on trading) and regulation 17 (limitations on compensation) apply mutatis mutandis to him
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He is required to disclose his name, registration status, and details of financial interest in the subject company at the time of:
- Making such recommendation or offering such opinion in personal capacity
- Responding to queries from audiences or journalists in personal capacity
- Communicating the research report or substance of the research report through public media
Journalists and Media Personnel
Journalists who are on the payrolls of media organizations such as newspapers or television are not required to get registered with SEBI. However:
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If they make recommendations or offer an opinion concerning securities or public offers through public media, such recommendations/opinions shall be based on the research reports of SEBI registered research analyst or any other SEBI registered intermediary permitted by SEBI to issue research report
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All provisions of regulation 16 on limitations on trading shall apply mutatis mutandis on such journalists
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They shall disclose the name and details of financial interest in the subject company
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They shall also disclose the name of RA/intermediary, its registration status, and details of financial interest, if any, of such RA/intermediary in the subject company
Practical Compliance Considerations
Television and Radio Appearances
When appearing on television or radio:
- Registration Status: State SEBI registration number at the beginning of the appearance
- Financial Interest: Disclose any financial interest in recommended securities
- Compensation: Disclose any compensation received from the subject company
- Standard Disclaimer: Use the standard market risk disclaimer
Print and Online Media
When authoring articles or providing quotes:
- Registration Status: Ensure registration status is mentioned in the article
- Financial Interest: Disclose financial interest in securities mentioned
- Context: Provide appropriate context for any recommendations
Social Media
When making recommendations through social media:
- Registration Status: Ensure profile includes registration status
- Disclosure: Include appropriate disclosures with recommendations
- Record: Maintain records of social media communications
Expert Legal Guidance
Anuj Desai & Associates provides expert legal services for Research Analysts on public appearance and media compliance. Our securities law experts help RAs develop compliant media policies, train personnel on disclosure requirements, and ensure compliance with regulatory obligations. We assist RAs in drafting standard disclosures, reviewing media materials, and responding to regulatory inquiries.