SEBI has introduced new guidelines for Part-Time Research Analysts (RAs) through its circular dated January 8, 2025. These guidelines allow professionals from non-financial backgrounds to engage in market research while maintaining their existing careers. However, strict eligibility criteria, compliance norms, and fee restrictions apply to ensure transparency and investor protection.
This blog explores who qualifies as a Part-Time Research Analyst, their responsibilities, restrictions, fee structure, and best practices to follow.
Who is a Part-Time Research Analyst?
A Part-Time Research Analyst (RA) is an individual or partnership firm that provides market research and stock recommendations while engaging in another unrelated profession or business. Unlike full-time RAs, they are permitted to work in other fields, provided those activities do not involve securities, investment advisory, or fund management.
Eligibility Criteria for Part-Time RAs
To qualify as a Part-Time RA, an individual must not be engaged in the securities industry. They can, however, work in fields such as:
✅ Who is Eligible?
- Chartered Accountants (CA), Company Secretaries (CS), or Cost Accountants (CMA) providing statutory services.
- Professors, Teachers, or Academicians (with a No Objection Certificate from their employer).
- Doctors, Architects, Lawyers, and other professionals not involved in financial services.
- Insurance agents (IRDAI-licensed), provided they maintain an arms-length distance from securities research.
❌ Who is Not Eligible?
- Anyone providing investment advice on securities, real estate, gold, cryptocurrency, or any other financial asset.
- Individuals or firms managing client funds.
- Stockbrokers, Portfolio Managers, and Mutual Fund Distributors.
- Anyone engaged in financial advisory services, unless separately registered as an Investment Adviser (IA).
- Social media financial influencers (finfluencers) and traders who provide stock recommendations, market outlooks, or investment tips in a professional capacity.
Do’s and Don’ts for Part-Time Research Analysts
✅ Do’s
✔ Maintain an arms-length separation between research and other professional/business activities.
✔ Disclose all sources of income and ensure no conflict of interest.
✔ Ensure compliance with SEBI guidelines, including qualifications, certifications, and reporting.
✔ Clearly state that non-research activities are not under SEBI’s purview.
✔ Use proper disclaimers (minimum font size 10 points) in all communications.
✔ Maintain records of research reports, client interactions, and recommendations.
✔ If employed, obtain a No Objection Certificate (NOC) from the employer.
✔ Comply with SEBI’s Insider Trading Rules and avoid conflicts of interest.
❌ Don’ts
🚫 Do not offer stock-specific recommendations without a research report.
🚫 Do not engage in fund management or handle client money.
🚫 Do not promise guaranteed returns or make misleading claims.
🚫 Do not trade securities using insider information.
🚫 Do not mix research activities with financial advisory or stockbroking services.
🚫 Do not engage in front-running (trading before issuing recommendations).
🚫 Social media finfluencers cannot register as Part-Time RAs if they provide investment advice or stock-specific recommendations.
Fee Structure and Limitations
Maximum Fees Chargeable
SEBI has placed a cap on the fees that Part-Time RAs can charge:
- ₹1,51,000 per annum per family (for Individual & HUF clients).
- Fee limit will be revised every three years based on the Cost Inflation Index (CII).
- Statutory charges (like GST) are not included in the limit.
Fee Guidelines
- Advance payments are allowed, but cannot exceed one quarter’s fees.
- If services are terminated before completion, a pro-rata refund must be issued.
- No breakage fee (cancellation penalty) can be charged.
- Fees for institutional clients, accredited investors, and corporate clients are not restricted and can be negotiated bilaterally.
Limitations and Compliance Requirements
1. Personal Trading Restrictions
- Part-Time RAs can trade in their own accounts.
- Cannot engage in proprietary trading using privileged research data.
- Must disclose personal holdings if they trade in the stocks they research.
2. KYC and Record-Keeping
- Must follow SEBI’s KYC guidelines.
- Maintain client records for at least five years.
- Retain recorded interactions (calls, emails, chats) to ensure compliance.
3. Website and Disclosure Requirements
- Must maintain a functional website.
- Disclose all services, disclaimers, and fees clearly.
- Transparency on client onboarding terms is mandatory.
4. Compliance Audits
- Must conduct an annual compliance audit.
- Audit report must be submitted to SEBI/RAASB by October 31st each year.
- If any violations are found, corrective action must be taken immediately.
5. Research Report Guidelines
- Research must be data-backed and well-documented.
- Reports must disclose methodology, stock selection rationale, and risks.
- If recommending a model portfolio, it must be benchmarked against an appropriate index.
Final Thoughts
SEBI’s January 8, 2025 circular on Part-Time Research Analysts opens up opportunities for professionals to offer legal and structured research services. However, strict transparency, compliance, and ethical standards must be maintained to avoid conflicts of interest and regulatory violations.
By following the Do’s and Don’ts, adhering to fee limits, and ensuring full disclosure, Part-Time RAs can build a credible and compliant research business in the stock market.
Would you consider becoming a Part-Time Research Analyst? Share your thoughts below!
