I was just reading about how stock brokers, AIF and PMS can have authorised persons and distributers for their products and services but does the same apply for RA?
I’m asking this because I know RIA cant get distributers to sell their “advice” and get compensated for it via commssions.
But can Research Analyst’s have their own in-house marketing distributers for the research who work on a "performance basis "
Asking this because the RA regulations exempt marketing and support services personnel from getting registered who are seperate from those actually creating the research report.
As you’ve pointed out rightly (under Point 4 of the FAQs for the RA Regulations), ‘clerical activities/marketing activities, back office assistance, support services, etc, in relation to publication and/or distribution of research report’ are not covered under the RA Regulations, and there does not seem to be a problem for a RA to be paying a part of the fee towards distribution of the research report for a fee/commission.
With respect to the fund flow, it would be best (not stated in the RA Regulations, but more as a good practice) if the fee is first collected by the RA, and then passed back towards the distributor/other service providers.
The only other SEBI Guideline to be kept in mind would be the Outsourcing Guidelines for Intermediaries by SEBI, which states that core activities should not be outsourced. Therefore, preparing of research reports/providing recommendations should not be outsourced in this case, and distribution of the same should be alright.
