SEBI Floats Proposal to Ease Call Recording Obligations for Research Analysts Serving Institutional Clients
The Securities and Exchange Board of India has released a consultation paper recommending a significant relaxation in the compliance requirements applicable to Research Analysts (RAs) — specifically concerning the mandatory upkeep of call recordings when engaging with institutional investors. The proposed amendments target both the SEBI (Research Analysts) Regulations, 2014 and the Master Circular for Research Analysts dated February 06, 2026, aiming to recalibrate regulatory burden in a risk-proportionate manner.
Background: What the Current Framework Requires
Existing Obligations Under the RA Regulations
Under the prevailing regulatory architecture, Regulation 25(1)(vii) of the SEBI (Research Analysts) Regulations, 2014 places a clear obligation on every Research Analyst or research entity to preserve records of all communications — encompassing emails, call recordings, and similar interaction logs — with clients as well as prospective clients, in the manner specified by SEBI.
Master Circular Provisions
The Master Circular for Research Analysts further elaborates on this requirement through two key provisions:
Paragraph 1.13 of Chapter I lays down the following mandates regarding KYC and record maintenance:
"RA shall maintain records of interactions, with all clients including prospective clients (prior to onboarding), where any conversation related to its services has taken place, inter-alia, in the form of:
i. Physical record written & signed by client;
ii. Telephone recordings;
iii. Email from registered email id;
iv. Record of SMS messages;
v. Any other legally verifiable record."
The same provision further mandates that:
- Record-keeping must commence from the very first interaction with the client and must continue until research services are fully concluded.
- All such records must be retained for a minimum period of five years.
- In situations involving an active dispute or a specific SEBI directive, records must be preserved until the dispute is resolved or until SEBI issues further instructions.
Paragraph 33(iii) of Annexure I of Chapter VII of the Master Circular reinforced that compliance with interaction record maintenance — including call recordings — was equally applicable to institutional investors and Qualified Institutional Buyers (QIBs), leaving no exemption for sophisticated market participants.
The Regulatory Problem: Why a Review Was Warranted
Industry Representations
SEBI received formal representations from market participants and the Industry Standard Forum for Research Analysts (RA-ISF) seeking a reconsideration of the blanket call recording requirement as applied to institutional investors. The central argument put forth was that institutional investors are categorically different from retail clients — they are entities equipped with:
- Specialized expertise to independently assess complex research outputs
- Substantial financial and analytical resources for conducting independent due diligence
- A thorough understanding of investment risks and opportunities
- Awareness of their legal rights and the regulatory mechanisms available for their protection