SEBI Proposes Relaxation in Call Recording Requirements

On May 18, 2026, the Securities and Exchange Board of India (“SEBI”) issued a consultation paper proposing amendments to the SEBI (Research Analysts) Regulations, 2014, and Master Circular for research analysts dated February 06, 2026, to relax the requirement of maintaining call recordings for interactions between research analysts (“RAs”) and institutional investors.

In December 2024, SEBI notified the SEBI (Research Analysts) (Third Amendment) Regulations, 2024, introducing significant changes to the regulatory framework governing research analysts, including the introduction of “part-time research analysts”, revised qualification and certification requirements, AI-related disclosure obligations, revised record maintenance requirements, and segregation norms between research and distribution activities.

Thereafter, on January 09, 2025, SEBI proposed expansion of responsibilities of research analysts and investment advisers, including enhanced compliance and operational obligations applicable to intermediaries engaged in providing investment advisory and research services.

Existing Regulatory Framework

Currently, Regulation 25 (1) (vii) of the Research Analysts (RA) Regulations requires research analysts to maintain records of communications with clients, including emails and call recordings.

Further, Paragraph 1.13 of the Master Circular relating to “KYC Requirements and maintenance of records” requires RAs to maintain records of interactions with all clients, including prospective clients, where any conversation relating to research services has taken place, including physical records written and signed by clients, telephone recordings, emails from registered email IDs, SMS records, and other legally verifiable records.

Such records are required to be maintained from the first interaction with the client till completion of research services and preserved for a period of five years. In case of disputes or where SEBI specifically directs preservation, the records are required to be retained till further resolution or directions.

In addition, Paragraph 33(iii) of Annexure I of Chapter VII of the Master Circular presently clarifies that maintenance of records of interactions, including call recordings, emails, and SMS records, is applicable for both fee-paying and non-fee paying clients, including institutional investors and Qualified Institutional Buyers (“QIBs”). The non-fee paying clients include clients receiving research services as a value-added service along with other services availed from the research entity or any other entity at the family/group level on a payable basis.

Separate call recordings are not required where interactions take place through modes such as emails or other means for which a digital footprint is available. The purpose of maintaining records of client interactions is to document interactions and facilitate redressal of potential grievances relating to research services provided by research analysts or research entities. The Master Circular requires compliance with maintenance of interaction records even in the case of institutional investors, Hindu Undivided Families (“HUFs”) and QIBs.

Industry Representations

SEBI noted that representations were received from market participants seeking review of the requirement of maintenance of call records for institutional investors on the ground that the requirement may not be risk-appropriate for such investors.

The consultation paper records the submissions made by the Industry Standard Forum for Research Analysts (“RA-ISF”) that institutional investors are sophisticated entities possessing specialised knowledge and resources to independently evaluate research inputs and investment opportunities.

The paper further notes that the requirement of recording client interactions is primarily intended to protect investor interests through supervisory oversight and that institutional investors are generally more aware of their legal rights and available regulatory mechanisms as compared to retail investors.

Proposed amendments

SEBI has proposed to amend Regulation 25(1)(vii) of the RA Regulations to provide that the requirement of maintaining call recordings for communication with institutional investors shall not be mandatory. The consultation paper also proposes insertion of Regulation 2(1) (ia) defining “institutional investor” with reference to Regulation 2(1)(y) of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 which includes a qualified institutional buyer and certain family trust or intermediary registered with SEBI having a net worth exceeding INR 500 crore as per the last audited financial statements, for the purposes of listing and/or trading.

Corresponding amendments have also been proposed to Paragraph 1.13 of Chapter I and Paragraph 33 of Annexure I of Chapter VII of the Master Circular for Research Analysts to clarify that while maintenance of call recordings would not be mandatory for institutional investor interactions, research analysts would continue to maintain other specified records for such investors and all records, including call recordings, for retail clients under Paragraph 1.13(b) of Chapter I of the Master Circular.