What Is the ₹1 Lakh Deposit Requirement for SEBI Registered Research Analysts?
A SEBI Registered Research Analyst has to keep a certain amount as a deposit. The amount depends on how many clients the Research Analyst has. If there are up to 150 clients, the deposit is ₹1 lakh.
If there are more clients, a higher deposit is needed. This deposit is separate from the SEBI registration fee.
How Much Deposit Is Required?
The deposit depends on the number of clients:
| Number of ClientsDeposit | |
|---|---|
| Up to 150 | ₹1 lakh |
| 151 to 300 | ₹2 lakh |
| 301 to 1,000 | ₹5 lakh |
| 1,001 or more | ₹10 lakh |
For example, if a Research Analyst has 100 clients, the deposit is ₹1 lakh. If there are 200 clients, the deposit is ₹2 lakh. So, the number of clients decides how much deposit is needed.
Which Client Number Is Used?
SEBI looks at the highest number of clients during the previous financial year. This means the highest client number reached during that year is used to decide the deposit.
For example, suppose a Research Analyst had 120 clients for most of the year. Later, the number reached 160 and then came down again. In this case, 160 will be counted because that was the highest number during the year, so the deposit will be ₹2 lakh.
Where Is the Deposit Kept?
The deposit can be kept with a scheduled bank. It can also be kept in a liquid mutual fund or an overnight mutual fund, as allowed by the rules.
The amount is kept under a lien in favour of RAASB. In simple words, a lien means the money is kept for this purpose and cannot be freely used like normal money.
Is ₹1 Lakh a SEBI Registration Fee?
No. The ₹1 lakh deposit and the SEBI registration fee are different. The registration fee is a fee that has to be paid, while the ₹1 lakh deposit is an amount that has to be kept separately.
So, ₹1 lakh is not the total cost of becoming a SEBI Registered Research Analyst.
What If the Number of Clients Increases?
If the number of clients increases enough to enter the next category, the deposit also increases. For example, if the highest number of clients is 140, the deposit is ₹1 lakh. If the highest number reaches 180, the deposit becomes ₹2 lakh.
The deposit has to be updated by 30 April of the next financial year.
Why Is This Deposit Required?
SEBI requires Research Analysts to keep this deposit as part of its rules. In some situations, the deposit can be used to pay certain unpaid amounts related to a dispute.
The main point is simple: a Research Analyst has to keep the correct deposit based on the number of clients.
What About the Old Capital Adequacy Requirement?
Earlier, Research Analysts had a capital adequacy requirement, but that requirement is no longer there. Now, the deposit amount is decided based on the number of clients.
So, the old capital adequacy rule and the current deposit rule are different.
Simple Example
Suppose a Research Analyst starts with 50 clients. Since there are fewer than 150 clients, the deposit is ₹1 lakh.
Later, the number of clients reaches 220. The Research Analyst now comes under the 151 to 300 client category, so the deposit increases to ₹2 lakh.
Final Thoughts
The ₹1 lakh deposit requirement for SEBI Registered Research Analysts is simple. If a Research Analyst has up to 150 clients, the deposit is ₹1 lakh. As the number of clients increases, the deposit can increase to ₹2 lakh, ₹5 lakh or ₹10 lakh.
This deposit is separate from the SEBI registration fee. Research Analysts should also check the latest SEBI and RAASB rules because these rules may change.
The deposit for a SEBI Registered Research Analyst depends on the number of clients. It starts at ₹1 lakh for up to 150 clients and increases as the number of clients grows.
