Cost Accountants to conduct Annual Audit of Research Analysts
Clarification on Eligibility of Members of the Institute of Cost Accountants of India to Conduct Annual Audit of Research Analysts
- The Securities and Exchange Board of India (SEBI) issued the Master Circular for Research Analysts dated February 06, 2026, which consolidates the various directions, guidelines, and reporting requirements applicable to Research Analysts (RAs).
- Paragraph 31 of Chapter VI of the Master Circular currently states that the annual compliance audit of a Research Analyst may be conducted by a member of the Institute of Chartered Accountants of India (ICAI) or the Institute of Company Secretaries of India (ICSI) to verify compliance with the provisions of the SEBI (Research Analysts) Regulations, 2014 and the circulars issued under those regulations.
- SEBI has received a representation from the Institute of Cost Accountants of India (ICMAI) requesting clarification regarding the eligibility of its members to perform such audits. Considering that Regulation 25(3) of the Research Analysts Regulations recognizes Cost Accountants for conducting annual compliance audits of Research Analysts, it has been decided to revise the relevant paragraph of the Master Circular to expressly include members of ICMAI.
- Accordingly, paragraph 31 of Chapter VI of the Master Circular shall be replaced with the following:
Annual Compliance Audit and Reporting
In accordance with Regulation 25(3) of the SEBI (Research Analysts) Regulations, 2014, every Research Analyst or research entity shall conduct an annual audit to ensure compliance with the RA Regulations and the circulars issued thereunder.The audit shall be carried out by a member of the Institute of Chartered Accountants of India (ICAI), the Institute of Company Secretaries of India (ICSI), or the Institute of Cost Accountants of India (ICMAI). The audit must be completed within six months from the end of the relevant financial year.
The Research Analyst or research entity shall submit the compliance audit report to RAASB/SEBI within one month from the date of the audit report, and in any case not later than October 31 of the relevant year for the preceding financial year.
The Research Analyst or research entity shall also disclose the status of the compliance audit report on its website, along with any adverse observations and the corrective measures taken, if applicable. In addition, the compliance audit report must be made available to its clients.
- The provisions of this circular shall come into effect from the date of its issuance.
- This circular is issued by SEBI in exercise of the powers conferred under Section 11(1) of the SEBI Act, 1992, read with Regulation 25(3) of the SEBI (Research Analysts) Regulations, 2014, with the objective of protecting investor interests and ensuring the proper development and regulation of the securities market.
- The circular has been issued with the approval of the competent authority.
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