Hello,
Can anyone guide on what are the sebi regulations around giving stock market tips/starting an advisory company ? I’m aware one needs to be a sebi registered research analyst, but any legalities around giving tips, running a marketing campaign which will give money back in case the tips fail, engaging finfluencers and so on ?
P.S. I am into option writing, futures trading and plan to start a company around advisory. @nithin
Hi Sam,
SEBI released a master circular on this recently; here is the link: SEBI | Master Circular for Investment Advisers
This should cover all your concerns 
@kulsum_khan Thanks for the link. How is investment advisor different from research analyst ?
If you give a customer personalised advice, you need to be an RIA. If you provide a generic view for everyone, then RA. So, if you give the same recommendation to all your customers, you must be an RA. Easier to be an RA than RIA in terms of compliance requirements.
Thank you @nithin for your reply. I want to provide a generic view, so will go for RA. But, where can I find legalities around marketing an advisory service ?
For example, I want to market as ‘Earn 5% a month, or money back’. Now, this may sound unrealistic or like a scheme, but where can I find legalities around such marketing if I genuinely want to provide such a service ? I know one cannot use the word ‘guaranteed returns’ as prescribed by sebi, so any similar legalities.
Get a legal opinion.
No guaranteed income schemes from the market. SEBI will shoot down this kind of advertisement.
You can do this under the radar in your private circles. The moment you publically announce it , your services will be followed by SEBI. Recently SEBI did a clean sweep through telegram and YouTube, who announced assured returns from market. Some of the major channels and finfluencers got affected.
Even the legal RA s are not supposed to publically announce his / her trades or investments. That will be considered as market manipulation.
Option selling OTMs create an illusion of market invincibility because of it’s high win rates. So does “buy the dip” strategies in a bull market and “short the pop” strategies in a bear market. It just takes few trades on black swan days to wipe out months and years of effort.
Okay, so one cannot even broadcast trade messages to his/her clients over sms or whatsapp inspite of being an sebi registered RA ?
I’m aware of that. I am a net profitable trader since a long time. You can check my profile on this forum, the older posts I mean. I don’t want to get into education as no one will disclose their core strategy. Also copy trading is not allowed in India, so thinking of advisory on the lines of if I don’t make a certain return, I will return the money back to clients.
why dont you test this with a closed circle of friends and scale up if its working?
Its working from the initial feedback, thats why I want to scale and do it the legal way.
Apply for SEBI RA then !
Rs10000 application fees.
Can Sebi RA himself trade and broadcast his ‘research’ as a service?
During the NISM RA exam - this question asked.
The answer is: The research analyst has a cooling period of 30 days for investing his own money for a stock he has recommended.
Not sure about exiting the position or hedging using FnO or speculation.
May be. But 5% a month guarantee is a strict no no with regulators. Also not a reality IMO.
Logically why would anyone making 5% a month ~ 80% annual returns venture into recommendation services?
@samsingh - They could keep quiet and mint money right?
I suppose 60% per annum is very much possible. With Option buying you have regularly done twice that 
With 50 lac margin making 30 lac a year is definitely possible for Option sellers (tougher on Zerodha though). It would be best to mix few strategies including intraday and STBT to smoothen tough times.
But yeah, no such advertising is legal!