Research Analysts (RAs) must maintain a register of clients containing specific information. This register serves as a central record of all client relationships and services provided. This article provides a comprehensive technical analysis of the client register requirements.
Regulatory Basis
Primary Provision: Regulation 25(1)(vi)
Regulation 25(1)(vi) requires:
"A register or record containing list of the clients along with client's PAN, the date and nature of the research service, details of the products/securities for which research service was provided and fee/consideration, if any charged/received for such research service."
What Must Be in the Client Register
1. List of Clients
- Complete list of all clients
- Both fee-paying and non-fee paying clients
2. PAN
- Permanent Account Number of each client
- For individuals: Personal PAN
- For non-individuals: Entity's PAN
3. Date
- Date of the research service
- Date of each interaction
4. Nature of Service
- Type of research service provided
- Research report
- Recommendation
- Model portfolio
- Trading call
5. Products/Securities
- Details of products/securities
- Specific securities covered
- Type of products
6. Fee/Consideration
- Fee charged or received
- Consideration received
- If no fee, indicate "nil"
Client Register Format
Example Format
| Client Name | PAN | Date | Nature of Service | Securities | Fee (₹) |
|---|---|---|---|---|---|
| Mr. A | ABCDE1234F | 01/06/2025 | Research Report | HDFC Bank | 5,000 |
| Mrs. B | FGHIJ5678K | 15/06/2025 | Model Portfolio | TCS, Infosys | 10,000 |
| ABC Company | ABCD12345X | 20/06/2025 | Recommendation | Reliance | 25,000 |
Client Identification
What to Include
- Client name
- Client PAN
- Client category (Individual/Non-Individual)
Why PAN is Important
- Unique identifier
- Enables tracking
- Avoids duplication
- Regulatory requirement
Nature of Service
Types of Services
| Service Type | Description |
|---|---|
| Research Report | Publication of research report |
| Recommendation | Buy/Sell/Hold recommendation |
| Model Portfolio | Portfolio recommendation |
| Trading Call | Intraday or ultra-short duration call |
| Public Appearance | Public appearance |
Fee/Consideration Record
What to Record
- Fee charged
- Fee received
- Consideration received
- If no fee: "Nil"
Why Record Fee
- Regulatory requirement
- Fee cap compliance
- Audit and inspection
Maintenance of the Register
Format
- Electronic or physical
- Organized and accessible
Updation
- Update regularly
- Update for each service
Retention
- Retain for five years
- As per Regulation 25(2)
Common Compliance Gaps
1. Not Maintaining Client Register
Some RAs do not maintain a client register.
Solution: Maintain a comprehensive client register.
2. Incomplete Register
Some RAs maintain incomplete registers.
Solution: Ensure all required fields are completed.
3. Not Including Non-Fee Paying Clients
Some RAs do not include non-fee paying clients.
Solution: Include all clients.
4. Not Updating Regularly
Some RAs do not update the register regularly.
Solution: Update the register after each service.
Consequences of Non-Compliance
1. Regulatory Action
SEBI may take action for non-compliance.
2. Lack of Client Visibility
RAs may not have visibility into their client base.
3. Penalties
SEBI may impose monetary penalties.
Conclusion and How Anuj Desai & Associates Can Help
The client register is a critical record-keeping requirement.
Anuj Desai & Associates offers specialized services to help RAs maintain client registers:
- Register setup and maintenance
- Client data management
- Compliance audit and advisory
Contact us today to ensure your client register complies with SEBI requirements. Our team will guide you through the process.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Readers are advised to consult qualified professionals for legal and compliance matters. Anuj Desai & Associates is a SEBI compliance consulting firm based in India.