The Securities and Exchange Board of India (SEBI) has expanded the range of professionals eligible to conduct annual audits of research analysts (RA) and investment advisers (IAs).
Until now, only members of the Institute of Chartered Accountants of India (ICAI) and the Institute of Company Secretaries of India (ICSI) were authorised to perform these audits, according to a PTI report.
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The move will now enable members of the Institute of Cost Accountants of India (ICMAI) to carry out such audit work.
A SEBI circular stated: “Given the representation from the Institute of Cost Accountants of India and considering the recognition of Cost Accountants to conduct annual audit of RAs, under Regulation 25(3) of the RA Regulations, it has been decided to modify the aforementioned paragraph to clarify eligibility of members of the Institute of Cost Accountants of India to conduct annual audit of RAs.”
The SEBI has accordingly revised its Master Circular for Research Analysts/Investment Advisers dated 6 February 2026 to add cost accountants to the list of professionals permitted to undertake compliance audits.
The regulator noted that the provisions of this circular shall be applicable from the date of issue.
Under the updated framework, RAs and IAs must arrange an annual audit of their compliance with SEBI rules within six months of the close of each financial year.
The report must be filed with the SEBI or the relevant supervisory entity – the Research Analyst Administration and Supervisory Body or the Investment Advisers Administration and Supervisory Body – within one month of the audit’s completion, and in any case no later than 31 October for the previous financial year.
Research analysts are additionally required to display the status of their compliance audit report on their websites.
They must also disclose any negative observations along with the remedial measures taken and share the report with their clients.
For investment advisers, the SEBI has further specified that they must keep on record an annual certificate confirming adherence to client-level segregation norms.
This certificate must be issued by a member of ICAI, ICSI or ICMAI within six months from the end of the financial year and form part of the compliance audit process.
