Sebi to Ease Research Analyst Compliance Rules

New Delhi, May 18 (PTI) Markets regulator Sebi on Monday proposed easing the requirement for research analysts to maintain call recordings of interactions with institutional clients, a move aimed at reducing compliance burden and improving ease of doing business.

In a consultation paper, the regulator suggested that research analysts (RAs) and research entities should no longer be required to maintain call recordings for communications with institutional investors, though they should still need to preserve other records of interactions, such as emails, SMS messages and any other legally verifiable documents.

The proposed relaxation will apply only to institutional investors, while the requirement to maintain all records, including call recordings, will continue for retail clients, Sebi suggested.

The regulator said the proposal follows representations from market participants and the Industry Standards Forum for Research Analysts, which argued that institutional investors are sophisticated entities with the expertise and resources to independently evaluate research inputs and investment opportunities.


The regulator noted that, unlike retail investors, institutional clients are generally well aware of their legal rights and the regulatory mechanisms available to protect them.

Sebi also said the research analyst business does not involve client-specific investment advice, asset management or transaction execution, making a risk-based approach to record-keeping appropriate.

To implement the proposal, the regulator has suggested amendments to the Sebi (Research Analysts) Regulations, 2014.

It has also proposed adopting the definition of "institutional investor" from the Sebi (Issue of Capital and Disclosure Requirements) Regulations, 2018.

The regulator has sought public comments on the proposal till June 8.