REVISED INVESTOR CHARTER FOR RESEARCH ANALYSTS
In a parallel move, SEBI has also issued a circular dated June 2, 2025 bearing reference SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/81, updating the Investor Charter for Research Analysts (“RAs”). This revised charter supersedes the earlier circular dated December 13, 2021 and amends Clause 5 of the Master Circular for Research Analysts dated May 21, 2024.
a. Revised Investor Charter by Research Analysts: As with RIAs, the updated framework for RAs has been introduced to reinforce investor confidence, encourage greater transparency in the dissemination of research reports, and adapt to new developments including the use of digital grievance mechanisms and artificial intelligence.
b. Dissemination of the revised Investor Charter: SEBI has instructed the BSE Limited (in its capacity as the ‘Research Analyst Administration and Supervisory Body’ (RAASB)), to ensure dissemination of the updated Investor Charter by all registered RAs. RAs are now required to publish the Investor Charter on their websites and mobile applications, make it available at office premises, and share it with clients at the time of onboarding.
c. Disclosure of conflict of interest: The revised Investor Charter requires that RAs maintain high standards of integrity, avoid conflicts of interest, and ensure that research recommendations are unbiased and based solely on public information and factual observations. It further mandates disclosures of any material conflict(s) of interest (including when third-party research is being distributed) and highlights the importance of client confidentiality until reports of RAs are made publicly available.
d. Service Levels: RAs are also required to provide clear timelines for their services, treat all clients equitably, and ensure advertisements comply with the Advertisement Code for IAs and RAs (issued under the Circular dated April 05, 2023 – Ref. SEBI/HO/MIRSD/MIRSD-PoD-2/P/CIR/2023/51). Importantly, as with RIAs, the use of artificial intelligence tools in conducting research must now be disclosed to clients, so that clients understand automated vs human input in research.
e. Expanding Investor Rights: The Investor Charter provides for the right to timely and satisfactory grievance redressal, protection from misleading or coercive clauses in agreements, and the right to exit services as per agreed terms. Vulnerable consumers are afforded additional protections to ensure equitable access.
f. Investor vigilance and RA accountability: The Investor Charter warns investors against accepting guaranteed returns or engaging with unregistered individuals who claim to be RAs and reminds clients to carefully assess research recommendations, ask questions, and make payments only through verified channels.
g. Data on complaints: Similar to RIAs, RAs are also now required to publish monthly data on investor complaints and their resolutions, promoting accountability through standardised disclosures.
Effective immediately, the revised Investor Charter for RAs reinforces SEBI’s ongoing push towards transparent and investor-aligned market practices. RAs should update their Investor Charter immediately, and disseminate the updated Investor Charter to their prospects and clients.