If you are a SEBI registered research analyst or a person who want to take the SEBI Research analyst licence or a person who are distributing commission based Investment products to their Investors they all have common queries can I sell both the products at a same time means Can I charge for my Research advice and at the same time can I sell the commissions products to them?
Before going to the further discussion I will explain you what happened in my case while taking the SEBI Research analyst License. I am attaching an Image below please go through it; it is a SEBI clarifications if they think they need more information’s about particular things.
I received my first clarification objection after 3 months from the date I have submitted my applications for the SEBI research analyst license. After successfully replying to the first clarification they send me the 2nd clarification on 25th April 2022 in which it clearly mentioned that you need to surrender the AP ( Authorized Partner) SE (stock exchanges) registration from broker side where someone get commissions from every transactions their customers made on that brokers platform and registration from AMFI, where someone get commissions by advising regular mutual funds to their investors.
Why it create a conflict of interest because your intention from reaping befits are from both side. First you recommend your Investors to Buy/Sell securities and taking service charges and Secondly you are encouraging your Investors to do frequent buy/sell of securities for your commission benefits that’s why the SEBI restrict you to do so and encourage you to reap benefits in Investors Portfolios from where you are getting benefits.
So, In short if you are having prospects in distribution business continue to do so in that field, because you are not alone many BIG banks, Securities Companies and others are doing distribution business although they have the SEBI Research analyst/Investment Adviser License.
They are BIG businesses they can segregate their distribution business with advising business which is difficult for an Individual and small enterprises to do so and maintain an arm length distance.
The bottom line is; NO you can’t do both the businesses at the same time and yes it can create conflict of interest if you are doing both businesses at a same time. So better choose one side and try to deliver you will get mass prospects.
Hope this article helps you to understand the things you need to know.