SEBI issues clarification on applicability of advertisement code on reports issued by research analysts

New Delhi: On Thursday, Securities and Exchange Board of India (SEBI) clarified that research reports and recommendations of research analysts (RAs) cannot be considered advertisements unless they contain anything that is in the nature of promotion of products or services offered by them, as per reports. 

This clarification came after SEBI received certain queries regarding the applicability of provisions of advertisement code on a research report issued by a RA. 

In its circular, SEBI said that the forms of communications, to which the advertisement code shall be applicable include pamphlets, circulars, brochures, notices or any other literature, document, information or material published, or designed for use in any publication or displays (such as newspaper, magazine, sign boards/hoardings at any location), in any electronic, wired or wireless communication or over any other audio-visual form of communication (such as television, tape recordings, motion pictures) or in any other manner whatsoever.

Additionally, a research report, irrespective of the mode of its dissemination to any investor or prospective investor, will be construed as an advertisement if anything contained in the said research report is either expressly or impliedly in the nature of the promotion of products or services offered by an RA.