SEBI Rules and Regulations for RAs and IAs
January 4, 2026 10 mins read

SEBI Rules and Regulations for RAs and IAs

Author: taxationconsultancy997@gmail.com
sebi rules and regulations

SEBI Rules and Regulations: A Complete Compliance Guide for Research Analysts and Investment Advisor

 SEBI (Securities and Exchange Board of India) plays a central role in regulating India’s financial and securities markets. Whether you are a Research Analyst (RA), an Investment Advisor (IA), or running a research-based financial service, complying with SEBI rules and regulations is mandatory. Compliance not only helps build your legal standing but also boosts credibility and trust among clients.

In this detailed guide, prepared collaboratively with Taxation Consultancy, we break down SEBI compliances into simplified sections so every SEBI-registered professional can clearly understand what’s required. From research reporting standards and client disclosures to trading restrictions and public appearances, we cover it all — with practical examples and case references.

Connect with SEBI Experts

Why SEBI Rules and Regulations Matter

SEBI was formed to protect investors and strengthen the integrity of the stock markets. Whether you are giving a simple buy call or full-blown research reports, every detail is monitored. Non-compliance can lead to:

  • Heavy monetary penalties
  • License suspension
  • Complete trading or advisory ban
  • Legal actions

Hence, every SEBI registered person — particularly Research Analysts and  sebi registered advisor  — must understand and follow rules and regulations of sebi diligently.

Who is a Research Analyst According to SEBI?

SEBI defines a Research Analyst as any person involved in providing research analysis, research reports, or research recommendations concerning securities. This includes individuals offering:

  • Buy, Sell, Hold calls
  • Price targets or stop-loss levels
  • Any opinions about companies listed (or to be listed) on stock exchanges

Important: If you provide these without SEBI registration, your services are illegal — regardless of whether you’re a single person or part of a large platform.

Understanding What SEBI Considers a “Recommendation”

Many RAs and IAs are unclear on what counts as a formal research recommendation. SEBI provides clear guidance:

A recommendation qualifies if it includes at least one of the following:

  • A clear buy / sell / hold call
  • A price target or stop-loss level

Even sharing one of these qualifies as a recommendation under SEBI — triggering all compliance obligations. That’s why even a Telegram message or a stock pick video on YouTube must adhere to compliance standards.

Example:

  • “Buy XYZ Ltd at ₹100, Target ₹125, Stop Loss ₹95” – counts as a recommendation
  • “XYZ Ltd is a good company with strong revenue” – NOT a recommendation

The moment you include target or call — it becomes regulated.

SEBI’s Mandatory Record-Keeping: Regulation 25 Explained

Under Regulation 25 of the  sebi research analyst regulations , 2014, every RA must maintain 8 records, of which four directly relate to recommendations:

  1. Signed and dated research report
  2. Documented rationale or proof for each recommendation
  3. Copies of all communications of research recommendations to clients
  4. Records of public appearances where recommendations were made

 A key compliance tip: The research report must be signed on or before the date of publication — never after. Backdating is considered non-compliance and may lead to penalties.

Personal Trading Restrictions: Regulation 16 (the “30-5 Rule”)

SEBI’s Regulation 16 places strict restrictions on personal trading for RAs to prevent conflict of interest or insider advantage.

Key Rule:

  • You cannot trade in a security 30 days before and 5 days after issuing a recommendation.

That’s a 35-day restriction period for each recommendation. If you revise your target or stop-loss, that counts as a new recommendation — and the 35-day compliance cycle restarts.

Example: Example of SEBI’s 30-5 Personal Trading Restriction Rule:

  • Buy Recommendation
    • Date: 1st February
    • Result: Analyst must avoid buying/selling the stock from 2nd January to 6th February.
  • Revised Target
    • Date: 5th February
    • Result: Treated as a new recommendation, triggering a fresh 30-day before + 5-day after restriction period.

 This is why many Research Analysts avoid trading in the securities they cover to avoid compliance traps.

Handholding vs. Updated Calls – Avoiding Common SEBI Pitfalls

One of the most misunderstood aspects in SEBI’s rules is the difference between issuing updated recommendations and handholding.

Handholding (Not Allowed):

Sending follow-up updates like:

  • “Exit now.”
  • “Hold until further notice.”
  • “Target reached, book profit.”

without issuing a new research report or rationale is considered handholding, which SEBI prohibits.

Updated Recommendation (Allowed):

If there’s significant news and you revise levels with documented rationale, signed reports, and proper filing, then it’s allowed and compliant. That’s a new recommendation.

Professionals offering intraday and F&O calls need to be especially careful here.

Taxation Consultancy Tip: Always treat every update as a fresh recommendation if you’re changing your view or levels. And document everything.

Regulation 18: IPO Involvement and Conflict of Interest

As per SEBI, a Research Analyst is barred from issuing any recommendation on a stock if:

  • They acted as a manager or co-manager in its IPO; and
  • The restriction applies for 40 days from listing

In addition, RAs are prohibited from being involved in or associated with:

  • Investment banking
  • Brokerage services
  • Merchant banking

This ensures independence and removes all conflict of interest.

Public Appearances and Mandatory Disclosures: rules and regulations of sebi 19, 20, and 21

Whether you’re making a research report, sending a WhatsApp message, or appearing on a YouTube channel — SEBI mandates disclosures at all times.

You must disclose:

  • If you or your relatives hold any stake in the company
  • Whether you/your firm have received compensation from the company
  • Any conflict of interest
  • Any market-making activities
  • Use of AI tools in preparing the analysis (if any)

Even common disclaimers like “Investment in securities market is subject to market risks” are expected and protect both you and your clients.

Regulation 21 specifically applies to public appearances:

If you speak on TV, social media, or webinars and are identified as RA, you must make clear disclosures. Non-compliance on just a YouTube video has triggered SEBI actions.

The Importance of Compliance Systems – Not Just Fulfilling Rules

SEBI compliance is not about memory, it’s about systems.

Most SEBI-registered analysts get penalized for minor things like:

  • Not signing a research report promptly
  • Not keeping rationale proof
  • Handholding instead of issuing new recommendations
  • Missing disclosures in WhatsApp or Telegram posts

 The solution? Build a compliance system. That’s where Taxation Consultancy comes in.

Common SEBI Violations (Avoid these!)

Here are some issues where most RAs fail SEBI’s compliance test:

  • Sharing trading calls with no documented rationale
  • Forgetting to disclose interest/conflict
  • Not recording calls made on YouTube or social media
  • Trading in stocks they recommended
  • Handholding clients after target or SL is hit

These can lead to serious penalties, which often could have been avoided with internal controls.

How Taxation Consultancy Helps You Stay SEBI Compliant

At Taxation Consultancy, we specialize in:

  • SEBI registration
  • Preparation of compliance systems
  • Audit and inspection support
  • Drafting compliant templates
  • Maintaining logs and research records
  • SEBI case support and advisory

We train and guide both new and established Research Analysts and Investment Advisors to build fully automated and compliant workflows.

Final Thoughts

Following  SEBI rules  and regulations is not simply about avoiding penalties — it’s about delivering transparent, professional, and responsible research services. When you’re compliant, your clients trust you more, regulators respect you, and your brand reputation grows.

With the right systems in place, you can focus on what matters most — building market insights and client relationships — and let compliance run in the background.

For a fully customized SEBI compliance setup, get in touch with us at Taxation Consultancy.

Also Read : Investment Advisor Registration SEBI – Process, Fees & Eligibility 2026

FAQ'S

SEBI (Securities and Exchange Board of India) is India’s market regulator responsible for regulating the securities market and protecting investor interests. SEBI ensures transparency, fairness, and legal compliance among market participants, including Research Analysts and Investment Advisors.

Anyone providing research reports, stock recommendations, buy/sell/hold calls, or target levels — whether publicly or privately — must be registered with SEBI. Unregistered analysts offering such services are considered non-compliant and may face penalties.

A recommendation includes any buy, sell, or hold call, or any price target or stop-loss level. Even sharing one of these elements — whether via PDF, social media, WhatsApp, or a video — counts as a regulated recommendation.

 SEBI’s Regulation 16 restricts personal trading. Analysts cannot trade in the recommended security for 30 days prior to and 5 days after the recommendation. Each fresh update is treated as a new recommendation and restarts the restriction window.  restricts personal trading. Analysts cannot trade in the recommended security for 30 days prior to and 5 days after the recommendation. Each fresh update is treated as a new recommendation and restarts the restriction window.

Handholding refers to follow-up messages like “exit now” or “hold further” sent after a recommendation without issuing a new report or rationale. SEBI prohibits handholding unless the recommendation is rewritten with complete documentation.

Under Regulation 25, an RA must maintain:

  • Signed & dated research reports
  • Documentary rationale for recommendations
  • Communication records with clients
  • Records of public appearances

These must be stored for audit purposes and presented during SEBI inspections.

Yes. Under Regulations 19, 20, and 21, every RA must disclose:

  • Personal and family stock holdings
  • Conflicts of interest
  • Compensation received from companies
  • Any positions involving market-making or merchant banking

Disclosures are mandatory in every report and public appearance.

Yes, but the revision must be treated as a new recommendation with updated rationale, signed report, and proper documentation. Otherwise, it may be treated as handholding.

No. Regulation 18 prohibits RAs from being associated with brokerage services, investment banking, merchant banking, or related businesses to avoid conflicts of interest.

Even if you share recommendations via Telegram, WhatsApp, or YouTube:

  • Record each recommendation
  • Include disclosures
  • Maintain rationale/documentary proof
  • Keep a signed report

SEBI considers these channels regulated communication.

Penalties may include:

  • Monetary fines
  • Suspension or cancellation of registration
  • Restrictions on market activities
  • Legal proceedings

Recent SEBI orders have penalized analysts for missing disclosures, no record-keeping, or unauthorized advisory.

Taxation Consultancy assists professionals by:

  • Setting up complete SEBI compliance systems
  • Preparing documentation templates
  • Providing audit and inspection help
  • Offering registration, record-keeping, and advisory services
  • Preventing common regulatory mistakes

Yes, but SEBI now requires analysts to disclose the extent of AI involvement in their research. Transparency in the analysis process is mandatory.

All records including reports, rationale, and public appearance logs must be maintained for a minimum of five years from the date of publishing the recommendation.

Any revision of levels (e.g., target or stop-loss) is treated as a new recommendation. SEBI’s personal trading restrictions and compliance obligations will apply fresh to that updated call.

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