On June 27, 2025, the Securities and Exchange Board of India (SEBI) issued a comprehensive Master Circular for Research Analysts (RAs), consolidating a wide range of prior directives into a unified regulatory framework. This move is designed to enhance professionalism, transparency, and investor protection in the Rs. 350 cr+ research domain.
- Consolidation of Norms & Supersession of Previous Circulars
This Master Circular supersedes earlier SEBI circulars (dating up to May 21, 2024), merging all applicable issuances into one consolidated document. It brings together critical regulations related to conflict of interest, disclosure protocols, record-keeping, and more—streamlining compliance for RAs.
- Functional Website & Investor Charter Display
Under Regulation 19A, every RA must maintain a functional website featuring details mandated by SEBI and confirm this by June 30, 2025. Additionally, the updated Investor Charter—focusing on transparency, grievance redressal, and financial literacy—must be prominently displayed across digital platforms and offices, ensuring clients are well-informed.
- Standardized Terms & Conditions (MITC)
SEBI has mandated disclosure of Most Important Terms and Conditions (MITC) in RA-client agreements per Regulation 24(6). Existing clients must be informed by June 30, 2025, with new clients immediately receiving the MITC. These terms include fee caps, conflict-of-interest policies, disclaimers, and guaranteed returns prohibitions.
- Fee Cap and Conflict of Interest Safeguards
The annual fee charged to individual or HUF clients remains capped at ₹1,51,000 (excluding statutory charges).
Importantly, RAs are now barred from issuing research on products they distribute, unless there’s full client-level segregation or activities are conducted through an arm’s-length structure.
- AI Use, Data Security & Disclosures
Reflecting the digital era, the circular requires RAs to disclose any AI tools used in preparing research reports and mandates robust data security and confidentiality measures.
- Model Portfolio Guidelines
For those managing model portfolios, SEBI introduces a structured framework: each basket of recommendations must specify securities with assigned weightages, along with clear launch and update dates—adding rigor to portfolio-based advice.
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- Record-Keeping & Audit Requirements
RAs must maintain comprehensive documentation—including KYC, client communications (emails, call logs), service agreements, and fee records—for a minimum of five years. Additionally, an annual compliance audit is mandatory, with findings reported to SEBI or RAASB.
- Governance & Compliance Mechanisms
Non-individual RAs are required to appoint a qualified compliance officer (ICAI, ICSI, ICMAI, or similar, with NISM certification) to oversee regulatory adherence. They must also institute robust conflict-of-interest policies, anti-money laundering (AML) protocols, and internal codes of conduct .
🚀 Why This Matters
Investor Protection & Transparency
Monthly disclosure of complaint data and public display of investor charters empower clients with essential information—driving trust and transparency.
Professional Accountability
MITC mandates and fee caps foster clarity in client engagements. The prohibition on research-distribution conflicts reinforces research quality.
Ethical & Digital Readiness
AI disclosures and stringent data-security norms position RAs for digital-era operations while upholding ethical standards.
Regulatory Streamlining
A unified circular simplifies compliance, ensuring RAs can efficiently align with current SEBI requirements.
✅ Takeaways for Research Analysts
Update your website to meet the functional and disclosure requirements by June 30, 2025.
Ensure MITC are integrated in both new and existing client agreements.
Publicly post monthly investor complaint and redressal statistics.
Modify internal structures to eliminate conflict of interest, especially regarding product distribution.
Plan for and conduct annual data audits, compliance reviews, and appoint a certified compliance officer.
If offering model portfolios, establish framework alignment with SEBI’s new standards.
SEBI’s June 27, 2025, Master Circular represents a progressive step toward reinforcing ethical conduct, operational transparency, and investor safeguarding in India’s research industry. By consolidating regulations and enforcing structured frameworks, SEBI aims not only to professionalize research analytics but also to foster greater market confidence and investor empowerment.
