What exactly does the Code of Conduct require of me?
In force
The Code of Conduct is the Third Schedule to the Regulations. It has eight clauses, all binding on an individual analyst, and SEBI leans on them in most enforcement orders.
Honesty and good faith. Stated in one line, with nothing to qualify it.
Diligence. Act with due skill, care and diligence, and prepare the report after thorough analysis.
Conflict of interest. You must address conflicts that affect your impartiality, not merely disclose them. Disclosure alone is not compliance.
Insider trading and front running. Separately, you may not front-run your own research report. That is a distinct offence from the dealing blackout.
Confidentiality. Keep the report confidential until it is public. Note the scope: this is about the report before publication, not about client data.
Professional standard. Observe high professional standards while preparing a report.
Compliance. Comply with every regulatory requirement applicable to your business. This is the clause SEBI uses to attach a circular breach to the Code.
Senior management responsibility. Senior management bears primary responsibility for standards and procedures. In a one-person practice you are the senior management, so there is nobody to delegate this to.
Worth knowing what is not here. The Code contains no clause on client confidentiality, no non-discrimination clause, and no duty to maintain professional competence. Those exist in the Investment Adviser code, not this one.
What SEBI says, word for word
Third Schedule, clause 2“Research analyst or research entity shall act with due skill, care and diligence and shall ensure that the research report is prepared after thorough analysis.”Source: SEBI (Research Analysts) Regulations, 2014 — Third Schedule, Code of Conduct Open document ↗
Third Schedule, clause 3“Research analyst or research entity shall effectively address conflict of interest which may affect the impartiality of its research analysis and research report and shall make appropriate disclosures to address the same.”Source: SEBI (Research Analysts) Regulations, 2014 — Third Schedule, Code of Conduct Open document ↗
Third Schedule, clause 4“Research analyst or research entity or its employees shall not engage in insider trading or front running or front running of its own research report.”Source: SEBI (Research Analysts) Regulations, 2014 — Third Schedule, Code of Conduct Open document ↗
Third Schedule, clause 5“Research analyst or research entity or its employees shall maintain confidentiality of report till the report is made public.”Source: SEBI (Research Analysts) Regulations, 2014 — Third Schedule, Code of Conduct Open document ↗
Third Schedule, clause 8“The senior management of research analyst or research entity shall bear primary responsibility for ensuring the maintenance of appropriate standards of conduct and adherence to proper procedures.”Source: SEBI (Research Analysts) Regulations, 2014 — Third Schedule, Code of Conduct Open document ↗