Legal & Support Info

Internal Policy

in terms of Securities and Exchange Board of India (Research Analysts) Regulations, 2014

SEBI, through its Notification No. LAD-NRO/GN/2014-15/07/1414 dated September 1, 2014, has introduced the SEBI (Research Analysts) Regulations, 2014 (referred to as the 'SEBI Regulations'). This policy has been developed in compliance with the Master Circular and other circulars issued by SEBI and BSE Limited periodically.

Applicability

This policy shall be applicable to Beacon Capital Advisors Private Limited (hereinafter referred to as "Applicant/Research Analyst") who intends to register itself with SEBI as Research Analyst and has appointed team of experts including Principal Officer (hereinafter referred as Research Analyst team) for carrying out activities of the Research Analyst under the brand name "Beacon Capital Advisors Private Limited".

The Applicant will be primarily responsible for preparation or publication of the content of the research report; or providing a research report or making recommendation or giving price target or offering an opinion on any security that are listed or to be listed in a Stock Exchange.

Definitions

"Associate" means an associate as defined in Securities and Exchange Board of India (Intermediaries) Regulations, 2008; Securities and Exchange Board of India (Intermediaries) Regulations, 2008 defines associate as any person controlled, directly or indirectly, by the intermediary, or any person who controls, directly or indirectly, the intermediary, or any entity or person under common control with such intermediary, and where such intermediary is a natural person will include any relative of such intermediary and where such intermediary is a body corporate, will include its group companies (as defined in the Monopolies and Restrictive Trade Practices Act, 1969 (Act No. 54 of 1969) or any re-enactment thereof) or companies under the same management.
"Price Target" means expectations of the Research Analyst on the future performance of specific securities.
"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 disclosures in the research report that are inaccurate, misleading or no longer applicable;
"Public offer" includes initial public offer, further public offer, offer for sale, disinvestment, takeover, buy-back or delisting of securities;
"Research Analyst" means a person who is primarily responsible for,-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.
— preparation or publication of the content of the research report; or
— providing research report; or
— making 'buy/sell/hold' recommendation; or
— giving price target; or
— offering an opinion concerning public offer,
"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;
"Research entity" means an intermediary registered with Board who is 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;
"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:-
— Comments on general trends in the securities market
— Discussions on the broad based indices
— Commentaries on economic, political or market conditions
— Periodic reports or other communications prepared for unit holders of mutual fund or alternative investment fund or clients of portfolio managers and investment advisers
— Internal communications that are not given to current or prospective clients
— Communications that constitute offer documents or prospectus that are circulated as per regulations made by the Board
— Statistical summaries of financial data of the companies
— Technical analysis relating to the demand and supply in a sector or index
— Any other communication which SEBI may specify from time to time.
"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.
"Subject company" means the company whose securities are the subject of a Research Report or a public appearance.

Internal Policies and Procedures to Effectively Address Conflict of Interest

Management of Conflict of Interest and Disclosure Requirements

Applicant will ensure that its Research Analyst team maintains arms-length relationship between its research activity and other activities. The core team will not be engaged in any other activity of the applicant other than research activity.

A. Limitations on trading by research analysts:

Personal trading activities of the Research Analyst team shall be monitored, recorded and wherever necessary, shall be subject to a formal approval process.
Applicant or Research Analyst team or their associates shall not –
— deal / trade in securities recommended / followed by the research analyst within thirty days before and five days after the publication of a research report;
— deal / trade in securities that the research analyst reviews in a manner contrary to his given recommendation;
— 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.

B. Compensation of research analyst:

The Research Analyst team shall not be entitled to any bonus, salary or other form of compensation that is based on specific brokerage services transactions.
Further, compensation of research analyst team shall be reviewed, documented and approved annually by Board of Directors of the applicant.
Research Analyst team shall not be subject to the supervision or control of any employee of the merchant banking or investment banking or brokerage services divisions of that research entity.

C. Limitation on publication of research report, public appearance, conduct of business etc.

Applicant and/or Research Analyst team shall not publish or distribute research report or research analysis or make public appearance regarding a subject company for which he has acted as a manager or co-manager at any time falling within a period of:Provided that Applicant may publish or distribute research report or research analysis or make public appearance within such forty day and ten day periods, subject to prior written approval of legal or compliance personnel as specified in the internal policies and procedures
— 40 days immediately following the day on which securities are priced if the offerings is an initial public offerings; or
— 10 days immediately following the day on which securities are priced if the offerings is a further public offering.
In case the Applicant is an acting as an underwriter of any initial public offering, it shall not publish or distribute a research report or make public appearance regarding that issuer for 25 days from the date of offering of securities.
In case the Applicant is an acting as a manager or co-manager of public offering of securities of a company, it shall not publish or distribute a research report or make public appearance concerning that company within fifteen days prior to date of entering into and fifteen days after expiration/waiver/termination of a lock-up agreement or any other agreement that the Research analyst has entered into with the subject company after the completion of public offering of securities.
The Research Report issued by the Research Analyst team of the applicant shall be based on adequate documentary research evidence.
The Applicant and/or Research Analyst team shall not participate in business activities designed to solicit investment banking or merchant banking or brokerage services business, such as sales pitches and deal road shows.
The Applicant shall not provide any promise or assurance of favourable 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.
Applicant shall not issue a Research Report that is not consistent with the views of the Research Analyst team regarding a subject company.
Applicant shall have adequate documentary basis, supported by research, for preparing a research report.

D. Disclosures in Research Report

Research Analyst team of applicant shall disclose all material information about himself including the following in its research reports:
— Business Activity
— Disciplinary History
— Terms and conditions on which it offers research report
— Details with respect to Ownership and Material Conflict of Interest such as:Whether the applicant or Research Analyst team or its/his associate or relatives has any Financial interest in the subject company, if yes, together with nature of such financial interest. Whether the applicant or Research Analyst team 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. 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. Details whether the applicant or research analyst team or his associate or his relative, has any other material conflict of interest at the time of publication of Research report or at the time of public appearance.
— Research Analyst team shall disclose the following in Research Report with regard to receipt to compensation:Details of any compensation received by Research Analyst or its/his/her/their associates from the subject company in past 12 months. Details of whether Research Analyst team or its associates have managed or co-managed the public offering of subject company in past 12 months. Details of whether Research Analyst team or its associates have received any compensation for investment banking or merchant banking of brokerage services from the subject company in past 12 months. Details of whether Research Analyst team or its associates have received any compensation for products or services other than above from the subject company in past 12 months. Details of any compensation or other benefits received by Research Analyst or its/his/her/their associates from the subject company or 3rd party in connection with the research report.
— Research Analyst team shall disclose in public appearance with regard to receipt of compensationWhether Research Analys team or its/his/her/their associates have received any compensation from the subject company in past 12 months. Whether the subject company is / was client of Research Analyst during 12 months preceding the date of distribution of research report and the types of such services provided by Research Analyst.
— Whether the Research Analyst team has served as an officer, director or employee of the subject company.
— Whether Research Analyst team 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.

E. Contents of Research Report

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.
If the Applicant employs a rating system, it must clearly define the meaning of each and such rating including the time horizon and benchmarks on which a rating is based.
If 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, whichever is shorter.

F. Distribution Of Research Reports

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, Research Analyst team or Directors or employee of applicant 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.

Other Conditions

Research Analyst team shall be NISM Certified or such other certification for research analysts as specified by SEBI.
Applicant and Research Analyst team shall maintain and preserve following records for a minimum period of 5 years:
— Research recommendation provided
— Rationale for arriving at research recommendation
— Record of public appearance
Research Analysts team shall forth with inform the applicant in writing about any information or particulars about him/her/them submitted to SEBI, which are found to be false or misleading in any material particular or are there is any change in information already submitted.
Research Analyst shall conduct annual audit in respect of compliance with the captioned SEBI Regulations from member of ICAI or ICSI.

The above policy is adopted for Research Analyst services to

Address actual or potential conflict of interest arising from such dealings or trading of securities of subject company;
Promote objective and reliable research that reflects the unbiased view of research analyst;
Prevent the use of research report or research analysis to manipulate the securities market.
Ensure independence of its research activities from its other business activities.