Research entity

A brokerage that publishes a note recommending a stock is doing more than sharing an opinion. It wants readers to act on it. It wants them to buy or sell.

SEBI treats this as a regulated activity. It does not matter if the brokerage charges a fee for the note or not.

A research entity is the registered firm that does this work. It issues research reports or opinions on securities. Its goal is to influence how people invest.

The workbook (Chapter 8, section 8.5) states that under the SEBI (Research Analysts) Regulations, 2014, a research entity is a registered intermediary, such as a stock broker or merchant banker, that issues research reports or opinions on securities to influence investment decisions.

Even offering research as a "value-added service," with no separate fee, still requires mandatory SEBI registration — the absence of a fee does not exempt the activity. All associated persons engaged in the research function must hold a valid NISM certification as SEBI specifies.

A related carve-out applies to advice, not research: under the SEBI (Investment Adviser) Regulations, 2013, a stock broker registered under the SEBI (Stock Brokers) Regulations, 2026 that gives investment advice incidental to its primary broking activity does not need separate investment-adviser registration — provided it still complies with the general obligations and responsibilities those regulations specify. Research entity registration and this incidental-advice carve-out are two different regulatory tracks for two different activities.

A brokerage, Meridian Broking Services, starts sending clients a free weekly note recommending stocks to buy or avoid, without charging anything extra for it.

Because this note is issued to influence investment decisions, Meridian must register as a research entity under the SEBI (Research Analysts) Regulations, 2014, and every analyst who contributes to the note must hold a valid NISM certification — the fact that clients pay nothing extra for the note does not remove the registration requirement.

Separately, a dealer at the same brokerage occasionally tells a client, in the course of executing trades, "this sector looks attractive right now." Because this is incidental to the broker's ordinary broking activity rather than a structured research product, the brokerage does not need a separate investment adviser registration for that comment — though it must still meet the general obligations SEBI's Investment Adviser Regulations impose on brokers giving incidental advice.

Chapter 8 (section 8.5, Research Reports and Advisory Services) introduces the research entity definition and the fee-irrelevant registration requirement, immediately before distinguishing it from the incidental-advice carve-out for stock brokers. Expect a question testing whether "no fee charged" removes the registration requirement (it does not) and which regulation governs research entities (the Research Analysts Regulations, 2014).

• Charging no separate fee for research does not exempt a broker from research-entity registration — "value-added service" is explicitly not an exemption.
• All associated persons need NISM certification, not just the entity itself.
• A stock broker giving investment advice incidental to broking does not need separate investment-adviser registration — but this carve-out is for advice, not for a structured research function, which always needs research-entity registration if it issues reports meant to influence decisions.
• Do not confuse a research entity (registered under the Research Analysts Regulations, 2014) with a stock broker's incidental advice carve-out (under the Investment Adviser Regulations, 2013) — they are governed by different regulations with different tests.