SEBI's New Guidelines Lead to Shutdown of Several Equity Research Firms

SEBI’s new guidelines for Research Analysts (RAs), aimed at curbing fraudulent practices, mandate compliance audits, KYC procedures, and stricter record-keeping, leading to increased operational costs for smaller firms.

As a result, several firms, including Sentinel Research, Stalwart Advisors, and Mystic Wealth, have announced the closure of their research services, citing the compliance burden and operational challenges.

Experts warn that while the new rules lower entry barriers for newcomers, they impose excessive restrictions on established players, potentially undermining the market's research quality.

This issue highlights broader concerns about regulatory overreach, as seen in SEBI’s equity research regulations forcing independent firms out of the market.