SEBI Eases Rules For Research Analysts, Removes Mandatory Call Recording Requirement For Institutional Investors

Mumbai, Oct 23: Market regulator SEBI on Friday eased compliance requirements for research analysts by removing the mandatory obligation to maintain call recordings of their interactions with institutional investors, a move aimed at reducing regulatory burden and improving ease of doing business.

In a circular, the market regulator said research analysts (RAs) and research entities will no longer be required to compulsorily retain recordings of conversations held with institutional investors. The relaxation follows the approval of the proposal by the SEBI board last month.

However, the regulator has retained the broader requirement for analysts to maintain records of interactions with all clients and prospective clients whenever discussions related to their services take place.

Alternative Record-Keeping Methods Permitted

Such records may be preserved in various forms, including signed physical documents, call recordings, emails from registered email IDs, SMS records, or any other legally verifiable method.

SEBI clarified that call recordings are not mandatory in cases where client communications occur through channels that already leave a digital trail, such as email exchanges.

The regulator said research analysts must maintain adequate records of client interactions, including those that take place before onboarding a client, to ensure transparency and accountability in their dealings.

Five-Year Record Retention Requirement Continues

Under the revised framework, records will continue to be preserved for a period of five years. In instances where a dispute arises, the records must be retained until the matter is resolved. Analysts will also be required to preserve records for a longer period if specifically directed by SEBI.

"RA shall maintain records of interactions, with all clients including prospective clients (before onboarding), where any conversation related to its services has taken place, inter alia, in the form of physical record written and signed by client; call recordings; email from registered email ID; record of SMS messages and any other legally verifiable record," SEBI said.

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Revised Provisions Effective November 8

The move is expected to provide operational flexibility to research analysts while maintaining regulatory oversight through alternative forms of verifiable documentation. The revised provisions will come into effect from November 8, SEBI said.

(Except for the headline, this article has not been edited by FPJ's editorial team and is auto-generated from an agency feed.)

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