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

Mumbai, October 23: The Securities and Exchange Board of India (SEBI) has taken steps to ease compliance for research analysts, eliminating the mandatory requirement for call recordings of their discussions with institutional investors, as part of efforts to streamline regulatory processes and enhance ease of doing business in the market.

A SEBI circular discloses that research analysts (RAs) and research entities will no longer be compelled to retain recordings of conversations with institutional investors. This relaxation was approved by the SEBI board in a recent meeting. However, the regulator has maintained the requirement for analysts to keep records of all client and prospective client interactions whenever discussions concerning their services occur.

Alternative Record-Keeping Methods Authorised Under the revised rules, research analysts can preserve these records in various formats, such as signed physical documents, call recordings, emails from registered email addresses, SMS records, or any other legally verifiable means. Verifying Call Recordings SEBI clarified that call recordings are not obligatory when client communications occur via channels that inherently create a digital record, for instance, email exchanges.

Analysts’ Record Keeping Obligations Remain Record retention for a period of five years will continue under the updated framework. If a dispute arises, records must be retained until the matter is settled. In cases where SEBI explicitly directs longer retention periods, analysts will be required to comply with those directives. Analysts’ Obligations to Maintain Records The revised rules require analysts to keep records of all client interactions, including those that may happen before a client is onboarded, to ensure transparency and accountability in their dealings.