SEBI issues clarification for Research Analysts (RAs) and Investment Advisors (IAs)

• Sachin Chawla
• 27 Mar 2026
• 149 Views

In a circular dated 25 March 2026, the Securities and Exchange Board of India (SEBI) issued clarification regarding eligibility of members of the Institute of Cost Accountants of India to conduct annual audits of Research Analysts (RAs). 

Additionally, in a separate circular released on the same day, the market regulator issued clarification regarding eligibility of members of the Institute of Cost Accountants of India to conduct annual audits of Investment Advisers (IAs). 

SEBI Circular for Research Analysts

SEBI, in its Master Circular for Research Analysts dated 6 February 2026, has provided a consolidated document outlining all directions, instructions and reporting requirements relating to the RAs. Paragraph 31 of Chapter VI of the Master Circular states that a member of the Institute of Chartered Accountants of India or the Institute of Company Secretaries of India is authorized to conduct the annual audit of an RA to verify compliance with the SEBI (Research Analysts) Regulations, 2014 and any circulars issued under these regulations.

Following representations from the Institute of Cost Accountants of India, and acknowledging the recognition of Cost Accountants to conduct annual audits of RAs under Regulation 25(3) of the RA Regulations, a decision was made to amend the aforementioned paragraph. The amendment was made to clarify the eligibility of members of the Institute of Cost Accountants of India to conduct RAs’ annual audits. Therefore, paragraph 31 of Chapter VI of the Master Circular has been replaced with the following:

“Annual audit report and adverse findings, if any:

In terms of regulation 25(3) of the RA Regulations, research analyst or research entity shall conduct annual audit in respect of compliance with RA regulations and circulars issued thereunder from a member of Institute of Chartered Accountants of India or Institute of Company Secretaries of India or Institute of Cost Accountants of India within six months from the end of each financial year and submit a compliance audit report to RAASB/SEBI within a period of one month from the date of the audit report but not later than October 31st of each year for the previous financial year. RA/research entity shall publish the status of the compliance audit report on its website and shall also publish the adverse findings of audit, if any, along with the action taken thereof on its website. RA/research entity shall provide the compliance audit report to its clients.”

SEBI Circular for Investment Advisors

The securities market regulator, in its Master Circular for Investment Advisors dated 6 February 2026, has provided a consolidated document that contains all the directions, instructions and reporting requirements for the IAs. 

Paragraph 31.2 of Chapter VII of the Master Circular states that members of either the Institute of Chartered Accountants of India or the Institute of Company Secretaries of India are authorized to conduct an IA’s annual audit. This audit is intended to verify compliance with the SEBI (Investment Advisers) Regulations, 2013 and any circulars issued under these regulations.

Following the representations from the Institute of Cost Accountants of India and considering the recognition of cost accountants to conduct IAs’ annual audits, under Regulation 19(3) of the IA Regulations, a decision was made to alter the aforementioned paragraph to clarify eligibility of members of the Institute of Cost Accountants of India to conduct IAs’ annual audit.

As a result, paragraph 31.2 of Chapter VII of the Master Circular has now been replaced with the following:

"To conduct annual audit and submit a report and adverse findings, if any:

In terms of regulation 19(3) of the IA Regulations, IA is required to conduct an annual audit in respect of compliance with the IA Regulations and circulars issued thereunder from a member of the  Institute  of  Chartered  Accountants  of  India or Institute  of  Company  Secretaries  of  India or Institute of Cost Accountants of India within six months from the end of each financial year. Submit a report of the same and adverse findings of the audit, if any, along with action taken thereof duly approved by the individual IA/management of the non-individual IA within a period of one month from  the  date  of  the  audit  report  but  not  later  than  October  31st  of  each  year  for  the  previous financial year.”

Additionally, paragraph 1 (i) (i) of Chapter I of the Master Circular,  has now been replaced  with  the following:

“The IAs shall maintain on record an annual certificate from a member of ICAI/ ICSI/ ICMAI or from an auditor confirming compliance with the client level segregation requirements as specified in Regulation 22 of the IA Regulations. Such annual certificate shall be obtained within 6 months of the end of the financial year and form part of compliance audit, in terms of Regulation 19(3) of the IA Regulations.”