Internal Policies & Control Procedure in
terms of SEBI (Research Analysts)
Regulations, 2014
INDEX
1
Preamble
2
Applicability
3
Definitions
4
Management of Conflict of Interest and
Disclosure Requirements
a)
Limitations on trading by research analysts
b)
Compensation of Research Analyst
c)
Limitation on Publication of Research
Report, Public Appearance, Conduct of
Business, etc.
d)
Disclosures in Research Report
5
Other Conditions
6
Review of the Policy
1.
Preamble
Securities Exchange Board of India vide its
Notification No. LAD-NRO/GN/2014-15/07/1414
dated 1st September, 2014 has
notified SEBI (Research Analysts)
Regulations, 2014. This regulations have
been introduced by SEBI with the objective
of fostering transparency in security
research and provide investors with more
reliable and useful information to make
investment decisions.
According to these Regulations, Research
Analysts or Research Entity are required to
put in place a comprehensive policy
framework as prescribed in Chapter III of
SEBI (Research Analysts) Regulations 2014.
2.
Applicability
The policy shall be applicable to all
employees of STOCKHIFI ADVISORY SERVICES
PRIVATE LIMITED engaged in Research
Department as a Research Analyst i.e. person
primarily responsible for preparation or
publication of the content of the research
report; or providing a research report or
Making ‘buy sell/ hold’ recommendation or
giving price target or offering opinion
concerning public offer with respect to
securities that are listed or to be listed
in a Stock Exchange whether or not such
person has the job title of ‘Research
Analyst’. It also includes an associated
person who reports directly or indirectly to
a research analyst(s).
3.
Definitions
Various terms shall have the following
definitions and the other terms shall have
the same meaning assigned to them in the
captioned SEBI Regulations.
a)
“Price Target” means expectations of
research analyst on the future performance
of specific securities.
b)
“Public Appearance” means any participation
in a conference call, seminar, forum
(including interactive and non-interactive
electronic forum), radio or television or
internet or web or print media broadcast,
authoring a print media article or other
public speaking activity in public media in
which a research analyst makes a
recommendation or offers an opinion,
concerning securities or public offer
provided that it does not include a password
protected webcast, conference call or such
other events with the clients, if all of the
event participants previously received the
research report or other documentation that
contains the required applicable disclosures
and that the research analyst appearing at
the event corrects and updates during the
public appearance any disclosure in the
research report that are inaccurate,
misleading or no longer applicable'
c)
“Public Offer” includes initial public
offer, further public offer, offer for sale,
disinvestment, takeover, buy-back or
delisting of securities.
d)
“Relative” means a person as defined in sub
section (77) of section 2 of the Companies
Act, 2013 and who is financially dependent
on independent research analyst or
individual research analyst employed by
research entity.
e)
“Research Analyst” means an Employee of
"STOCKHIFI ADVISORY SERVICES PVT. LTD." who
is primarily responsible for:
i. Preparation or publication of the content
of the research report or
ii. Providing research report or
iii. Making 'buy/sell/hold' recommendation
or
iv. Giving Price target or
v. Offering an opinion concerning public
offer
- with respect to securities that are listed
or to be listed in a stock exchange, whether
or not any such person has the job title of
'research analyst' and includes any other
entities engaged in issuance of research
report or research analysis. It also
includes any associated person who reports
directly or indirectly to such a research
analyst in connection with activities
provided above.
f)
“Research Entity” means STOCKHIFI ADVISORY
SERVICES PVT. LTD. or any other intermediary
registered with SEBI who is / shall also
engaged in Merchant Banking or Investment
Banking or Brokerage Services or
underwriting services and issue research
report or research analysis in its own name
through the individuals employed by it as
research analyst and includes any other
intermediary engaged in issuance of research
report or research analysis.
g)
“Research Report” means any written or
electronic communication that includes
research analysis
or research recommendation or an opinion
concerning securities or public offer,
providing a basis for investment decision
and does not include the following
communications :-
i. Comments on generaltrends in the
securities market
ii. Discussions on the broad based indices
iii. Commentaries on economic, political or
market conditions
iv. Periodic reports or other communications
prepared for unit holders of mutual fund or
alternative investment fund or clients of
portfolio managers and investment advisers
v. lnternal communications that are not
given to current or prospective clients
vi. Communications that constitute offer
documents or prospectus that are circulated
as per regulations made by the Board
vii. Statistical summaries of financial data
of the companies
viii. Technical analysis relating to the
demand and supply in a sector or index
ix. Any other communication which the Board
may specify from time to time
h)
“Significant news or event” means any news
or event which is expected to have a
material impact on or that reflects a
material change to, the subject company's
earnings, operations or financial condition,
other than unpublished price sensitive
information, as specified in the internal
policies and procedure of the research
analyst or research entity.
(i) “Subject
Company” means the company whose securities
are the subject of a research report or a
public appearance.
(j) “Senior
Management” shall mean and include Board of
Directors of STOCKHIFI ADVISORY SERVICES
PVT. LTD. and the person’s one level below
them.
(k) “Third Party Research Report” means a
research report produced by a person or
entity other than Research Analysts of
STOCKHIFI ADVISORY SERVICES PVT. LTD. or by
STOCKHIFI ADVISORY SERVICES PVT. LTD.
itself.
4.
Management of Conflict of Interest and
Disclosure Requirements
STOCKHIFI ADVISORY SERVICES PVT. LTD. and
its Research Analysts shall maintain
arms-length relationship between its
research activity and other activities.
Investment Advisory services shall be
provided by a specific division of STOCKHIFI
ADVISORY SERVICES PVT. LTD.
(“www.stockhifi.com & www.commohifi.com”),
which will be segregated from and maintain
arms length relationship with the other
sister concern of Stockhifi Advisory
Services Pvt. Ltd. – Tradehifi Stock Broking
Pvt Ltd engaged in broking services.
(a)
Limitations on trading by research analysts:
·
Personal trading activities of the
individuals employed as research analysts
are not entertained.
·
Research Analysts employed by STOCKHIFI
ADVISORY SERVICES PVT. LTD. or their
associates shall not (a) deal / trade in
securities recommended /followed by the
research analyst within 30 days before and
five days after the publication of a
research report; (b) deal / trade in
securities that the research analyst reviews
in a manner contrary to his given
recommendation; (c) purchase or receive
securities of the issuer before the issuer's
initial public offering, if the issuer is
principally engaged in the same types of
business as companies that the research
analyst follows or recommends.
·
However, the above restrictions to trade/
deal in securities shall not be applicable
in case of significant news or event
concerning the subject company or based upon
an unanticipated significant change in the
personal financial circumstances of the
research analyst, subject to prior written
approval from Management of STOCKHIFI
ADVISORY SERVICES PVT. LTD.
·
Further, all the research analysts shall
always adhered to the Conflict of interest
Policy of the Company, developed and
implemented by the company pursuant to SEBI
Circular dated 27/OS/20L3. For the sake of
brevity of this policy the same is not
narrated herein, however, this
policy shall be read, understood and
complied by all Research Analysts in
conjunction with the said Conflict of
Interest Policy as may be prevalent from
time to time.
[b] Compensation of Research Analysts:
·
The Research Analysts in the employment of
STOCKHIFI ADVISORY SERVICES PVT. LTD. shall
not be entitled to any bonus, salary or
other form of compensation that is based on
specific brokerage services transactions.
·
Further, compensation of all research
analysts shall be reviewed, documented and
approved annually by Committee of Board of
Directors of STOCKHIFI ADVISORY SERVICES
PVT. LTD..
·
Such Research Analysts shall perform
his/her/their duties independently and shall
not be under supervision /control of any
employee of brokerage services division of
STOCKHIFI ADVISORY SERVICES PVT. LTD..
[cl Limitation on Publication of Research
Report, Public Appearance, Conduct of
Business etc.
·
The Research Report issued by Research
Analysts of STOCKHIFI ADVISORY SERVICES PVT.
LTD. shall be based on adequate documentary
research evidence.
·
STOCKHIFI ADVISORY SERVICES PVT. LTD. and/or
its Research Analysts shall not provide any
promise or assurance of favorable review in
research report to the Company or Industry
as a consideration to commence or influence
a business relationship of for the receipt
of compensation or other benefits.
·
STOCKHIFI ADVISORY SERVICES PVT. LTD. shall
ensure that its Research Analysts are
separate from other employees who are
performing sales trading, dealing, corporate
finance advisory or any other activity that
may affect the independence of research
report.
·
Research Analysts shall not (a) engage
directly / indirectly in any communication
with a current or prospective client in the
presence of personnel from brokerage service
divisions or Company Management (b) engage
in sales or marketing related activities
related to . Brokerage Service divisions nor
engage in any communication with a current
or prospective client about transactions of
such Brokerage Service Division; (c) make
any promise or assurance of favorable review
in its research report to a company or
industry or sector or group of companies or
business group as consideration to commence
or influence a business relationship or for
the receipt of compensation
or other benefits; (d) participate in
business activities designed to solicit
investment banking or merchant banking or
brokerage services business such as sales
pitches and deal road shows
·
Research Analysts shall have adequate
documentary basis, supported by research,
for preparing a research report.
[d] Disclosures in Research Report
Research Analysts of STOCKHIFI ADVISORY
SERVICES PVT. LTD. who are engaged in
research activity and preparing research
report shall disclose all material
information about himself or STOCKHIFI
ADVISORY SERVICES PVT. LTD. including the
following in its research reports:
·
Business Activity
·
Disciplinary History
·
Terms and conditions on which it offers
research report
·
Details of Associates v. Details with
respect to Ownership and Material Conflict
of Interest such as :
(a)
Whether STOCKHIFI ADVISORY SERVICES PVT.
LTD. or any Research Analysts or its/his
associate or relatives has any Financial
interest in the subject company, if yes,
together with nature of such financial
interest
(b)
Whether STOCKHIFI ADVISORY SERVICES PVT.
LTD. or any Research Analysts or its/his
associate or relatives have actual /
beneficial ownership of 1, % or more
securities of subject company at the end of
the month immediately preceding the date of
publication of research report or date of
public appearance, as the case may be.
(c) Details of actual / beneficial ownership
of one percent or more securities of the
subject company, at the end of month
immediately preceding the date of
publication the research report or date of
public appearance
(d) Details of any material conflict of
interest at the time of publication of
research report or at the time of public
appearance
(e) Details of any compensation received by
STOCKHIFI ADVISORY SERVICES PVT. LTD. or
Research Analysts or its/his/her/their
associates from the subject company in past
12 months
(f) Details of whether STOCKHIFI ADVISORY
SERVICES PVT. LTD. or its associates have
managed or co-managed the public offering of
subject company in past 12 months
(g) Details of whether STOCKHIFI ADVISORY
SERVICES PVT. LTD. or its associates have
received any compensation for investment
banking or merchant banking of brokerage
services from the subject company in past 12
months (h) Details of whether STOCKHIFI
ADVISORY SERVICES PVT. LTD. or its
associates have received any compensation
for products or services other than above
from the subject company in past 12 months
(i) Details of any compensation or other
benefits received by STOCKHIFI ADVISORY
SERVICES PVT. LTD. or Research Analysts or
its/his/her/their associates from the
subject company or 3rd party in connection
with the research report
·
STOCKHIFI ADVISORY SERVICES PVT. LTD. and /
or its Research Analysts shall disclose in
public appearance with regard to receipt of
compensation (a) whether STOCKHIFI ADVISORY
SERVICES PVT. LTD. or Research Analysts or
its/his/her/their associates have received
any compensation from the subject company in
past 12 months (b) whether the subject
company is / was client of STOCKHIFI
ADVISORY SERVICES PVT. LTD. during 12 months
preceding the date of distribution of
research report and the types of such
services provided by STOCKHIFI ADVISORY
SERVICES PVT. LTD..
·
Whether the Research Analysts has served as
an officer, director or employee of the
subject company
·
Whether STOCKHIFI ADVISORY SERVICES PVT.
LTD. or its Research Analysts has been
engaged in market making activity of the
subject company
·
Such other disclosures in research reports /
public appearance as specified by SEBI under
any other regulations
·
Such Research Reports reflects the factual
information about the subject company and
are based on reliable information. Such
reports also contain the definition of terms
which are used in making recommendations and
such terms have been used consistently.
·
lf such Research Reports contain either a
rating or price target for atleast 1 year,
the same shall also provide for the graph of
daily closing price of such securities for
the period assigned or for a 3 year period,
which ever is shorter.
·
Such Research Report Shall not be issued
selectively to internal trading personnel or
to a particular client or group of other
clients in advance of other clients who are
entitled to receive the research report.
·
In case of distribution of any 3'd party
research report, Research Analysts of
STOCKHIFI ADVISORY SERVICES PVT. LTD. shall
review such 3td party report for any untrue
statement of material fact or any false or
misleading information, provided that
STOCKHIFI ADVISORY SERVICES PVT. LTD. or its
Research Analysts do not have any direct /
indirect business or contractual
relationship with such 3'd party research
provider.
·
In case, any Research Analysts or Director
or employee of STOCKHIFI ADVISORY SERVICES
PVT. LTD. appears in public media and make
any recommendation, the disclosure of his /
its name, registration status and details of
financial interest shall invariably made at
the time of making such recommendation or
offering any opinion in his personal
capacity, responding to any queries of
audience or journalists in personal capacity
and communicating the research report or its
substance through public media.
5.
Other conditions
·
Research Analysts of STOCKHIFI ADVISORY
SERVICES PVT. LTD. shall obtain NISM
certification or such other certification
for research analysts as specified by SEBI
within 2 years of commencement of the
captioned SEBI Regulations i.e. on/before
29/11/2017.
·
STOCKHIFI ADVISORY SERVICES PVT. LTD. and
its Research Analysts shall maintain and
preserve following records for a minimum
period of 5 years:
·
Research Report duly signed and dated
·
Research recommendation provided
·
Rationale for arriving at research
recommendation
·
Record of public appearance
·
Research Analysts shall forthwith inform the
STOCKHIFI ADVISORY SERVICES PVT. LTD. in
writing about any information or particulars
about him/her/them submitted to STOCKHIFI
ADVISORY SERVICES PVT. LTD. which are found
to be false or misleading in any material
particular or are there is any change in
information already submitted.
·
Investment Advisory services should be
provided only after providing with
sufficient Free Trial, assessing risk
profile and suggesting suitable product &
then registering online on our website
there by entering into agreement &
acceptance of the Term & Conditions.
·
Clients wishing to avail the advisory
services from STOCKHIFI ADVISORY SERVICES
PVT. LTD., should mandatorily be required to
register online at
www.stockhifi.com
&
www.commohifi.com
accordingly.
·
The Compliance Officer of STOCKHIFI ADVISORY
SERVICES PVT. LTD. shall monitor and comply
in this regard.
·
STOCKHIFI ADVISORY SERVICES PVT. LTD. shall
conduct annual audit in respect of
compliance with the captioned SEBI
Regulations from member of ICAI or ICSI.
6.
Review
of the Policy
The policy will be reviewed as and when
considered necessary by the Board.
