CA body urges Sebi to address delays, restrictive norms in RA registration

BCAS flags rising delays, restrictive norms and ambiguities in Sebi's RA registration process, seeking clarity on migration, principal officer rules and eligibility for investor training entities

The Bombay Chartered Accountants' Society (BCAS) has urged the Securities and Exchange Board of India (Sebi) to address what it described as restrictive norms and rising delays in the registration of research analysts (RAs).

 

In a 22-page letter sent earlier this week, the industry body flagged seven key issues in the current framework. These include the absence of a structured migration mechanism for individual RAs transitioning to corporate or LLP structures, ambiguity around restrictions on ‘other activities’, and lack of clarity on appointing a common principal officer across multiple divisions.

 

BCAS said the absence of a formal migration framework has led to operational disruptions such as temporary discontinuation of services, re-execution of client agreements, duplication of KYC processes and increased administrative burden.

 

The body has also sought clarification on permitting RA registration for entities engaged in investor training using live market data, as well as vendors offering black-box algorithmic strategies — subject to appropriate disclosures and compliance safeguards.

 

On timelines, BCAS highlighted that the approval process now involves an additional step through BSE, compared to earlier when only Sebi approval was required. It noted that while approvals previously took 15–45 days from application, timelines have “increased substantially” under the revised process.

 

The letter also pointed to what it termed “misinterpretations” leading to rejection of applications where the principal officer of a non-individual RA entity serves as a director or partner in other entities, including group companies.

 

Additional concerns raised include rejection of applications involving authorised persons, AMFI-registered mutual fund distributors and entities offering investor training using live data or black-box strategies. BCAS also flagged ambiguity around appointing a CEO as principal officer.

 

The industry body has sought formal clarifications and regulatory alignment to ensure consistency and ease of doing business, while continuing to uphold investor protection standards.