Archive / Research Analyst / Qualities of a Good Research Report

nism-series-xv-what-is-excluded-from-research-report-definition[ RESEARCH ANALYST ]

Under the SEBI (Research Analysts) Regulations, 2014, which of the following communications is specifically EXCLUDED from the statutory definition of a 'Research Report'?

[ A ]A detailed written equity analysis recommending a 'Strong Buy' on an individual listed company with a 12-month target price

[ B ]A thematic industry report containing specific buy/sell recommendations on all listed corporate banking stocks

[ C ]General economic commentaries, discussions on broad-based market indices, periodic unitholder newsletters of mutual funds/AIFs, and offer documents/prospectus prepared under SEBI regulations[ CORRECT ]

[ D ]A research memo sent to institutional clients recommending short selling in a specific mid-cap company's shares

Takeaway

Option C is correct: General economic commentaries, discussions on broad-based market indices, periodic unitholder newsletters of mutual funds/AIFs, and offer documents/prospectus prepared under SEBI regulations

Derivation

Under Regulation 2(1)(w) of SEBI (Research Analysts) Regulations, 2014 and official FAQs, 'Research Report' explicitly EXCLUDES: (1) Comments on general trends in securities markets, (2) Discussions on broad-based market indices (e.g., general commentary on Nifty 50), (3) Economic, political, or market condition commentaries, (4) Periodic reports or communications prepared for unitholders of Mutual Funds, AIFs, or PMS clients, (5) Internal memos not given to clients, (6) Offer documents or prospectuses, (7) Pure statistical data summaries, and (8) Technical analysis of sector supply/demand. This tests statutory exclusions. The common error is assuming broad economic commentary constitutes a regulated research report.

Why the others fail

A — A detailed written equity analysis recommending a 'Strong Buy' on an individual listed company with a 12-month target price

Specific stock recommendations with price targets sent to clients fall squarely under the core definition of a regulated Research Report.

B — A thematic industry report containing specific buy/sell recommendations on all listed corporate banking stocks

Sector reports containing explicit buy/sell recommendations on listed companies are subject to full Research Analyst regulations.

D — A research memo sent to institutional clients recommending short selling in a specific mid-cap company's shares

Institutional memos recommending specific short sales in individual securities are regulated research reports requiring full disclosures.