Can I provide both research and distribution (e.g. mutual fund/PMS) services to the same client?
In force
Not to the same client/family for the same product. Regulation 26C exists precisely to stop the conflict of interest where you'd earn distribution commission on a product you're also 'independently' researching.
If you distribute Mutual Fund Scheme A, you cannot also provide research services on Scheme A to the same client/family, and vice versa.
You *can* research individual stocks and separately distribute mutual funds/PMS/AIF products to the same client, as long as you don't research those specific fund/PMS products.
For institutional clients/QIBs, this segregation requirement is waived if the client gives a standard waiver (email or other verifiable mode is fine).
What SEBI says, word for word
FAQ Circular, Q31“RA/research entity cannot provide research services for the securities/products in case it also provides distribution services for such securities/products... provided they are not providing research services on such products/securities being distributed and are providing such distribution services through separately identifiable department or division or business unit... or through a separate entity on an arms' length basis.”Source: SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/105, dated July 23, 2025 Open document ↗
FAQ Circular, Q35“all research analysts/entities are exempted from 'client level segregation of research and distribution activities' for their institutional clients/QIBs if such a client provides a standard waiver.”Source: SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/105, dated July 23, 2025 Open document ↗