SEBI released a consultation paper proposing amendments to Research Analysts Regulations 2014, specifically relaxing call record maintenance requirements for institutional clients. Currently, research analysts must maintain records of all telephonic communications with clients. The proposed amendment distinguishes between retail and institutional clients, allowing relaxed compliance for institutional interactions. This follows industry feedback about operational burden and cost implications. Public comments are being sought on implementation framework, compliance timelines, and risk mitigation measures for investor protection.

The consultation paper addresses a long-standing compliance burden faced by research analysts who must currently maintain detailed records of all client communications under SEBI regulations. For institutional clients like mutual funds, insurance companies, and portfolio managers - who have sophisticated risk management systems and regulatory oversight - maintaining granular call records creates disproportionate operational costs without significant investor protection benefits. The amendment recognizes the differential risk profile between retail and institutional clients. Institutional clients typically have dedicated compliance teams, documented investment processes, and are themselves regulated entities, making them less vulnerable to potential research analyst misconduct. This risk-based regulatory approach aligns with global best practices where compliance requirements are calibrated based on client sophistication. The proposal could reduce operational costs for research firms, potentially improving research quality and accessibility. However, SEBI must balance operational efficiency with maintaining adequate audit trails for market surveillance and enforcement actions.