Sebi to simplify compliance framework for research analysts

Mumbai: The Securities and Exchange Board of India (Sebi) has proposed easing compliance requirements for research analysts by exempting them from maintaining call recordings of interactions with institutional investors.

At present, research analysts and research entities are required to preserve records of all communications with clients and prospective clients, including call recordings, emails, SMS messages and other legally verifiable records. These records must be maintained for five years and retained longer if disputes arise or if directed by the regulator.

Sebi said the proposal follows representations from market participants seeking a review of the requirement to maintain call recordings for institutional investors.


"Industry Standard Forum for Research Analysts has...represented that institutional investors, in general, are sophisticated entities, possessing specialised knowledge and substantial resources required to independently evaluate complex research inputs and investment opportunities," Sebi said in a discussion paper on Monday.

"Such investors have adequate knowledge to evaluate investment opportunities vis-a-vis risks involved in the same and to undertake due diligence before making investment basis the research reports. The requirement of recording for client interactions is primarily intended to protect the interest of investors by facilitating supervisory oversight," it said.