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NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Other Services Provided by Brokers

A broker wishes to provide research recommendations to clients on a commercial basis. Which statement is correct?

The broker must be registered as a research analyst with SEBI, or conduct the activity through a compliant registered structure. Trading member status, an exchange certificate or a client disclaimer does not substitute for the registration required under SEBI's research analyst regulations.

  1. ANo registration is needed if the broker is already a trading member
  2. BThe broker must be registered as a Research Analyst under SEBI's regulations, or the activity must be carried out through a registered entity or compliant structureCorrect
  3. COnly a certificate from the exchange is required
  4. DRecommendations may be given freely if the client signs a disclaimer

Explanation

Research analyst activity is regulated by SEBI's Research Analysts Regulations, and a person offering research services must be registered. Being a trading member does not by itself authorise this activity. An exchange certificate or a client disclaimer does not replace SEBI registration.

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