Less than 10% analysts registered with Sebi

So far, a tenth of the estimated 5,000 analysts have registered with Sebi: Sources

There is no rush yet, despite a looming deadline, for analysts tracking listed Indian companies to register with the Securities and Exchange Board of India (Sebi).

The final date for doing so under Sebi's research analyst regulations, issued last September, ends this weekend for brokerage entities and independent analysts. Those attached to brokerage and other research entities have a two-year period from the date of implementation of the regulations, to attain both certification and registration. No such leeway exists for independent analysts.

“Most independent analysts have taken time trying to understand the regulations and the fine print. Then again, they have to prepare for the NISM (National Institute of Securities Markets) test and wait for the results before applying to Sebi," explained  Santanu Syam, head of operations, Angel Broking.

So far, say sectoral sources, less than a tenth of the estimated 5,000 analysts (those working independently and those attached to entities) appear to have registered.

Some broking houses have been less generous with the time frame. A leading one has given its analysts only time till June 15 to complete individual registrations. "Otherwise, we would not be able to sign-off on reports produced by us,” said a senior technical analyst.

The regulations are aimed at maintaining the independence of such analysts from sales and investment banking teams.

The slow nature of registrations has been largely attributed to the NISM test not distinguishing between fundamental and technical analysis. A large number of independent technical analysts are finding it difficult, as it requires them to learn aspects of stock analysis which are reportedly not relevant for them.

“It is unfair to expect technical analysts to give an exam based on fundamental analysis. A technical analyst is not even supposed to know the name of the company, much less its financials,” complained a senior official of a brokerage house.

The test is based on a module prepared by NISM. Making it mandatory for research analysts has deterred some of the older hands. “For those who have been in the sector for a very long time, it is a bit of a hassle to appear for the exam and register. I know some senior people who are finding it difficult to appear for such exams,” said the head of a domestic brokerage house.
DELAY IN REGISTRATIONS

10%
Analysts have been registered with Sebi

5,000
Total number of analysts* in the sector

May 31, 2015
Deadline for registration for independent analysts and brokerage firms

2 years
Time within implementation of research analysts regulations brokerage analysts have to be registered

Sept 2014
The regulations came into effect

* Both independent analysts and broker firms