Research Analyst Regulations 2015

# PART II
## Statutory Notifications (S. R. O)
### GOVERNMENT OF PAKISTAN
### SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN
### NOTIFICATION

*Islamabad, the 27th July, 2015*

S. R. O. **709** (I) 2015. In exercise of powers conferred under clause (q) of sub-section (2) of section 169 of the Securities Act, 2015 (Act No. III of 2015), the Securities and Exchange Commission of Pakistan hereby makes the following regulations, the same being previously published in the Official Gazette vide S.R.O. 232 (I)/2015 dated March 17, 2015 and also placed on its website as required sub-section (4) of the said Act, namely:

### 1. Short title and commencement.
(1) These Regulations shall be called the Research Analyst Regulations, 2015.
(2) They shall come into force at once.

### 2. Definitions.
a) “Act” means the Securities Act, 2015 (Act No III of 2015);
b) “Close relative” shall mean the spouse(s) and lineal ascendant(s) and descendant(s) of the Research Analyst;
c) “Commission” means the Securities and Exchange Commission of Pakistan established under section 3 of the Securities and Exchange Commission of Pakistan Act, 1997 (XLII of 1997);
d) "Independent Research Analyst" means a person performing the functions of Research Analyst who is not engaged in any other regulated securities activity;
e) “Public Appearance” means any participation in a conference call, seminar, forum (including interactive and non-interactive electronic forum), radio or television or internet or web or print media broadcast, authoring a print media article or other public speaking activity in which a Research Analyst, or an officer, director, or employee of a Research Entity or Independent Research Analyst, makes a recommendation or offers an opinion, concerning listed securities or a public offer;
f) “Research Analyst” means a person, by whatever name called, who is involved in the preparation, writing and/or publication of a Research Report or the substance of a Research Report concerning securities that are listed or to be listed on a stock exchange registered in Pakistan;

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g) “Research Entity” means a company which provides services of issuance of a Research Report in its own name through the Research Analysts employed by it, and includes any other entity associated with the securities markets in any manner, also engaged in the issuance of Research Report and also provides following services:
    i). acting as a securities adviser;
    ii). acting as an underwriter;
    iii). offering brokerage services;
    iv). participating in a selling or an offering for the issuer or otherwise acting in furtherance of a public offer of the issuer;
    v). acting as an adviser in a merger or acquisition;
    vi). providing or arranging venture capital or equity or debt;
    vii). serving as placement agent for the issuer or otherwise acting in furtherance of a private offering of the issuer; and
    viii). any other services as specified by the Commission.

h) “Research Report” includes a written communication, in any form, which includes:
    i) a Price Target – the fundamental value of a listed security or a public offer derived by the Research Analyst; or
    ii) a “buy/sell/hold” recommendation or an analysis or opinion concerning a listed security or a public offer, providing information reasonably sufficient upon which to base an investment decision, but does not include the following communications:
        i). comments on general trends in the securities market;
        ii). commentaries on economic, political or market conditions;
        iii). periodic reports or other communications prepared for unit holders of mutual funds or collective investment schemes;
        iv). internal communications that are not given to current or prospective clients;
        v). communications that constitute offer documents or prospectus that are circulated under a specific law;
        vi). statistical summaries of financial data of the companies;
        vii). technical analysis relating to the demand and supply in a sector or the index; and
        viii). any other communication which the Commission may specify from time to time.

i) “Subject Company” includes the issuer or company whose public offer or securities are the subject of a Research Report or a Public Appearance.

j) “Third Party Research Report” means a Research Report produced by any international research house located outside Pakistan.

All other words and expressions used but not defined in these regulations shall have the same meanings as assigned to them under the Act.

### 3. Qualification, experience and certification requirement.
(1) A Research Analyst including an Independent Research Analyst, shall have the following minimum qualifications:
    (a) A professional qualification in accounting and finance or a graduate degree in finance, accountancy, business management, commerce, economics, capital market and financial services provided by a university recognized by the Higher Education Commission of Pakistan; or