INTERNAL POLICIES AND CONTROL PROCEDURES
Internal Policy & Control Procedure in terms of Securities and
Exchange Board of India (Research Analysts) Regulations, 2014
SEBI vide its Notification No. LAD-NRO/GN/2014-15/07/1414 dated September 1, 2014 has notified
SEBI (Research Analysts) Regulations, 2014 (hereinafter referred to as ‘SEBI Regulations’). These
regulations have been introduced by SEBI with the objective of fostering transparency in security
research and provide the investors with more reliable and useful information to make investment
decisions. According to these regulations, Research Analyst(s) or Research Entity are required to put
in place a comprehensive policy framework as prescribed in Chapter III of the SEBI Regulations
. To ensure compliance with SEBI Regulations, Mr. VARUN BHARGAV (hereinafter referred
to as ‘Research Analyst), SEBI LICENSE/REGISTRATION HOLDER “VARUN
BHARGAV PROPRIETOR OF PROFIT X RESEARCH” SEBI REGISTERED RESEARCH
ANALYST NO. INH000014508.
is required to adopt and adhere to such regulations, subject to the following internal policies and
control procedures:
A. Applicability This policy shall be applicable to Research Analyst and all his employees engaged as
research analysts i.e. a person primarily responsible for preparation or publication of the content of
the research report; or providing a research report or making ‘buy/sell/hold’ recommendation or
giving price target or offering an opinion concerning public offer with respect to securities that are
listed or proposed to be listed in a Stock Exchange, whether or not such person has the job title of a
‘research analyst’. It also includes an associated person who reports directly or indirectly to the
Research Analyst.
B. Definitions Various terms shall have the following definitions and the other terms shall have the
same meaning assigned to them in the SEBI Regulations.
“Associate” means associate as defined in Securities and Exchange Board of India (Intermediaries)
Regulations, 2008. Securities and Exchange Board of India (Intermediaries) Regulations, 2008 defines
associate as any person controlled, directly or indirectly, by the intermediary, or any person who
controls, directly or indirectly, the intermediary, or any entity or person under common control with
such intermediary, and where such intermediary is a natural person will include any relative of such
intermediary and where such intermediary is a body corporate, will include its group companies (as
defined in the Monopolies and Restrictive Trade Practices Act, 1969 (Act No. 54 of 1969) or any reenactment thereof) or companies under the same management.
“Price Target” means expectations of the Research Analyst on the future performance of specific
securities.
“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 public media in
which a Research Analyst makes a recommendation or offers an opinion, concerning securities or
public offer; provided that it does not include a password protected webcast, conference call or such
other events with the clients, if all of the event participants previously received the research report
or other documentation that contains the required applicable disclosures and that the Research
Analyst appearing at the event corrects and updates during the public appearance any disclosure in
the Research Report that are inaccurate, misleading or no longer applicable.
“Public Offer” includes initial public offer, further public offer, offer for sale, disinvestment,
takeover, buy-back or delisting of securities.
“Research Analyst” means a person who is primarily responsible for: 1. Preparation or publication
of the content of the research report; or 2. Providing research report; or 3. Making ‘buy/sell/hold’
recommendation; or 4. Giving price target; or 5. Offering an opinion concerning public offer, with
respect to securities that are listed or to be listed in a stock exchange, whether or not any such
person has the job title of ‘research analyst’ and includes any other entities engaged in issuance of
research report or research analysis. It also includes any associated person who reports directly or
indirectly to such a research analyst in connection with activities provided above.
“Relative” means a person as defined in sub section (77) of section 2 of the Companies Act, 2013
and who is financially dependent on independent research analyst or individual research analyst
employed by research entity;
“Research Entity” means an intermediary registered with SEBI who is also engaged in merchant
banking or investment banking or brokerage services or underwriting services and issue research
report or research analysis in its own name through the individuals employed by it as research
analyst and includes any other intermediary engaged in issuance of research report or research
analysis.
“Research Report” means any written or electronic communication that includes research analysis
or research recommendation or an opinion concerning securities or public offer, providing a basis for
investment decision and does not include the following communications :- o Comments on general
trends in the securities market o Discussions on the broad based indices o Commentaries on
economic, political or market conditions o Periodic reports or other communications prepared for
unit holders of mutual fund or alternative investment fund or clients of portfolio managers and
investment advisers o Internal communications that are not given to current or prospective clients o
Communications that constitute offer documents or prospectus that are circulated as per regulations
made by the Board o Statistical summaries of financial data of the companies o Technical analysis
relating to the demand and supply in a sector or index o Any other communication which SEBI may
specify from time to time.
“Significant news or event” means any news or event which is expected to have a material impact
on or that reflects a material change to, the subject company’s earnings, operations or financial
condition, other than unpublished price sensitive information.
“Subject company” means the company whose securities are the subject of a Research Report or a
public appearance.
C. Management of Conflict of Interest and Disclosure Requirements : The Research Analyst shall
maintain arms-length relationship between the research activities and other activities.
a) Limitations on trading by research analysts:
- Personal trading activities of the individuals employed as research analysts, if any, shall be
monitored, recorded and wherever necessary, shall be subject to a formal approval process. - Research Analyst or individuals employed as research analysts, if any, or their associates shall not:
deal or trade in securities recommended / followed by the Research Analyst within 30 days before
and 5 days after the publication of a Research Report;
deal or trade in securities that the Research Analyst reviews in a manner contrary to his given
recommendation;
purchase or receive securities of the issuer before the issuer’s initial public offering, if the issuer is
principally engaged in the same types of business as companies that the Research Analyst follows or
recommends.
However, the above restrictions to deal / trade in securities shall not be applicable in case of
significant news or event concerning the subject company or based upon an unanticipated significant
change in the personal financial circumstances of the Research Analyst or individuals employed as
research analysts, if any, subject to prior written approval from the Research Analyst.
b) Limitations on Publication of Research Report, Public Appearance, Conduct of Business etc. - The Research Analyst shall not publish or distribute research report or research analysis or make
public appearance regarding a subject company for which he has acted as a manager or co-manager
at any time falling within a period of: - 40 days immediately following the day on which securities are priced if the offering is an initial
public offering; or - 10 days immediately following the day on which securities are priced if the offering is a further
public offering. - In case the Research Analyst is acting as an underwriter of any initial public offering, he shall not
publish or distribute a research report or make public appearance regarding that issuer for 25 days
from the date of offering. - In case the Research Analyst has acted as a manager or co-manager of public offering of securities
of a company, he shall not publish or distribute a research report or make public appearance
concerning that company within 15 days prior to date of entering into and 15 days after expiration /
waiver / termination of a lock-up agreement or any other agreement that the Research Analyst has
entered into with the subject company that restricts or prohibits the sale of securities held by the
subject company after the completion of public offering of securities. - The Research Analyst shall not participate in business activities designed to solicit investment
banking or merchant banking or brokerage services business, such as sales pitches and deal road
shows. - The Research Analyst shall have adequate documentary basis, supported by research, for
preparing a research report. - The Research Analyst shall not provide any promise or assurance of favourable review in the
Research Report to a company or industry or sector or group of companies or business group as a
consideration to commence or influence a business relationship of for the receipt of compensation
or other benefits. - The Research Analyst shall not issue a Research Report that is not consistent with the views of the
individuals employed as research analyst regarding a subject company.
c) Disclosures in Research Report The Research Analyst shall disclose all material information
including the business activity, disciplinary history, the terms and conditions on which the Research
Report is offered, details of associates and such other information as is necessary to take an
investment decision, including the following: - The Research Analyst shall disclose the following in Research Report and in public appearance with
regard to ownership and material conflicts of interest:
whether the Research Analyst or his associate or his relative has any financial interest in the subject
company and the nature of such financial interest;
whether the Research Analyst or his associates or relatives, have actual/beneficial ownership of 1%
or more securities of the subject company, at the end of the month immediately preceding the date
of publication of the Research Report or date of the public appearance;
whether the research analyst or his associate or his relative, has any other material conflict of
interest at the time of publication of the Research Report or at the time of public appearance; 2. The
Research Analyst shall disclose the following in Research Report with regard to receipt of
compensation:
whether he or his associates have received any compensation from the subject company in the
past 12 months; whether he or his associates have managed or co-managed public offering of
securities for the subject company in the past 12 months;
whether he or his associates have received any compensation for investment banking or merchant
banking or brokerage services from the subject company in the past 12 months;
whether he or his associates have received any compensation for products or services other than
investment banking or merchant banking or brokerage services from the subject company in the past
12 months;
whether he or his associates have received any compensation or other benefits from the subject
company or third party in connection with the Research Report. - The Research Analyst shall disclose the following in Research Report with regard to receipt of
compensation: whether he or his associates have received any compensation from the subject
company in the past 12 months; whether the subject company is or was a client during 12 months
preceding the date of distribution of research report and the types of such services provided. - Whether the Research Analyst has served as an officer, director or employee of the subject
company. - Whether the Research Analyst has been engaged in market making activity for the subject
company. - Such other disclosures in the Research Report or public appearance as specified by SEBI under any
other regulations.
d) Contents of Research Report - The Research analyst shall ensure that facts in the Research Reports are based on reliable
information and shall define the terms used in making recommendations, and these terms shall be
consistently used. - If the Research Analyst employs a rating system, it must clearly define the meaning of each such
rating including the time horizon and benchmarks on which a rating is based. - If a Research Report contains either a rating or price target for subject company’s securities and
the Research Analyst has assigned a rating or price target to the securities for at least 1 year, such
Research Report shall also provide the graph of daily closing price of such securities for the period
assigned or for a 3-year period, whichever is shorter. - The Research Analyst shall disclose the registration status and details of financial interest in the
subject company, if he makes public appearance. - The Research Report shall not be made available selectively to internal trading personnel or a
particular client or class of clients in advance of other clients who are entitled to receive the
Research Report. - In case of distribution of any third party research report, the Research Analyst shall review such
third party research report for any untrue statement of material fact or any false or misleading
information. The Research Analyst shall also disclose any material conflict of interest of such third
party research provider or he shall provide a web address that directs a recipient to the relevant
disclosures.
D. Maintenance of Records - The Research Analyst shall maintain the following records: o Research Report duly signed and
dated; o Research recommendation provided; o Rationale for arriving at research recommendation;
o Record of public appearance. - All records shall be maintained either in physical or electronic form and preserved for a minimum
period of 5 years. Provided that where records are required to be duly signed and are maintained in
electronic form, such records shall be digitally signed. - The Research Analyst shall conduct annual audit in respect of compliance with the SEBI
Regulations from a member of Institute of Chartered Accountants of India or Institute of Company
Secretaries of India.
E. Other conditions: - The Research Analyst shall be the compliance officer responsible for monitoring the compliance of
the provisions of the Securities and Exchange Board of India Act, 1992, these SEBI Regulations and
circulars issued by SEBI. - The Research Analyst shall ensure that his employees or partners, as may be applicable, comply
with the certification and qualification requirements under regulation 7 at all times.
Conflict of Interest Policy
Securities and Exchange Board of India (‘SEBI’) vide its Circular No. CIR/MIRSD/5/2013 dated August
27, 2013 has notified General Guidelines for intermediaries, recognised stock exchanges, recognised
clearing corporations, depositories and their associated persons in securities market (hereinafter
referred to as ‘Guidelines’) with the objective of avoiding or dealing with or managing conflict of
interest by them. According to these Guidelines, all intermediaries including the Research Analyst(s)
or Research Entity are required to put in place a Conflict of Interest Policy (hereinafter referred to as
‘Policy’).
To ensure compliance with the said Guidelines, Mr. VARUN BHARGAV (hereinafter
referred to as ‘Research Analyst), SEBI LICENSE/REGISTRATION HOLDER
“VARUN BHARGAV PROPRIETOR OF PROFIT X RESEARCH” SEBI REGISTERED
RESEARCH ANALYST NO. INH000014508.
is required to adopt and adhere to such Guidelines
. A. Applicability This Policy shall be applicable to the Research Analyst and all his employees engaged
as research analysts. It shall also be applicable to an associated person who reports directly or
indirectly to the Research Analyst.
B. Purpose 1. The purpose of this Policy is to set out the approach to identify and manage conflicts of
interest which may arise during the course of business activities. - This Policy aims at:
identifying circumstances which may give rise to conflicts of interest entailing a material risk of
damage to clients’ interests;
establishing appropriate procedures and systems to manage those conflicts; and
ensuring the maintenance of such procedures and systems in an effort to prevent actual damage to
clients’ interests through conflicts identified.
C. Policy
The Research Analyst shall: - lay down policies and internal procedures to identify and avoid or to deal or manage actual or
potential conflict of interest; - develop an internal code of conduct governing operations and formulate standards of appropriate
conduct in the performance of their activities and ensure to communicate such policies, procedures
and code to all concerned; - develop measures to prevent or limit any person from exercising inappropriate influence over the
way in which the services are carried out; - at all times maintain high standards of integrity in the conduct of his business;
- ensure fair treatment of his clients and not discriminate amongst them;
- ensure that his personal interest does not, at any time conflict with his duty on his clients and
client’s interest always takes primacy in his advice, investment decisions and transactions; - make appropriate disclosure to the clients of possible source or potential areas of conflict of
interest which would impair his ability to render fair, objective and unbiased services; - endeavor to reduce opportunities for conflict through prescriptive measures such as through
information barriers to block or hinder the flow of information from one department/unit, if any, to
another; - place appropriate restrictions on transactions in securities while handling a mandate of issuer or
client in respect of such security so as to avoid any conflict; - not deal in securities while in possession of material non published information;
- not to communicate the material non published information while dealing in securities on behalf
of others; - not in any way contribute to manipulate the demand for or supply of securities in the market or
to influence prices of securities; - not have an incentive structure that encourages sale of products not suiting the risk profile of his
clients; - not share information received from clients or pertaining to them, obtained as a result of their
dealings, for his personal interest.
APPOINTMENT OF COMPLIANCE OFFICER
Mr. VARUN BHARGAV would be the Compliance Officer under this Code.
The compliance officer is responsible for monitoring the compliance of the provisions of the Act,
these regulations and circulars issued by the Board.
The Compliance Officer shall maintain a record for the purpose of adherence to the Code of Conduct.
The Compliance Officer shall assist all the analysts and its associates, if any in addressing any
clarifications regarding the Regulations and the Company’s Code of Conduct.
In order to discharge his functions effectively, the Compliance Officer shall be adequately
empowered and provided with adequate infrastructure to effectively discharge his function. In the
performance of his duties, the Compliance Officer shall have access to all information and
documents relating to the Securities of the Companies under research. The Compliance Officer shall
act as the focal point for dealings with SEBI in connection with all matters relating to the compliance
and effective implementation of the Regulations and this Code.
CORRESPONDENCE AND CLARIFICATION All correspondence and
queries concerning this Code should be sent to the Compliance Officer
Mr VARUN BHARGAV, Email – [email protected] or [email protected]
Mobile-91-9516598552
Mr. VARUN BHARGAV Place: VIDISHA (MP) Registered Address-A 230 BALAJI PARADISE VIDISHA PIN
464001
SEBI LICENSE/REGISTRATION HOLDER “VARUN BHARGAV
PROPRIETOR OF PROFIT X RESEARCH” SEBI REGISTERED RESEARCH
ANALYST NO. INH000014508.