The Standard Terms of Service client acknowledgment is a critical element of Research Analyst (RA) client onboarding. This acknowledgment ensures that clients understand the nature of the service, the associated risks, and their rights and obligations. This article provides a comprehensive technical analysis of the Standard Terms of Service and the client acknowledgment requirement.
Regulatory Basis
The Standard Terms of Service is specified in Annexure-B of the Master Circular for Research Analysts dated February 06, 2026. It forms part of the terms and conditions disclosure under Regulation 24(6).
The Standard Terms of Service Acknowledgment
Exact Wording
"I / We have read and understood the terms and conditions applicable to a research analyst as defined under regulation 2(1)(u) of the SEBI (Research Analyst) Regulations, 2014, including the fee structure. I/We are subscribing to the research services for our own benefits and consumption, and any reliance placed on the research report provided by research analyst shall be as per our own judgement and assessment of the conclusions contained in the research report. I/We understand that --
(i) Any investment made based on the recommendations in the research report are subject to market risk.
(ii) Recommendations in the research report do not provide any assurance of returns.
(iii) There is no recourse to claim any losses incurred on the investments made based on the recommendations in the research report."
Breakdown of the Acknowledgment
1. Understanding of Terms
"I / We have read and understood the terms and conditions applicable to a research analyst as defined under regulation 2(1)(u) of the SEBI (Research Analyst) Regulations, 2014, including the fee structure."
Purpose: Client confirms they have read and understood the terms and conditions.
2. Subscription for Own Benefit
"I/We are subscribing to the research services for our own benefits and consumption."
Purpose: Client confirms they are subscribing for their own benefit.
3. Reliance on Own Judgement
"any reliance placed on the research report provided by research analyst shall be as per our own judgement and assessment of the conclusions contained in the research report."
Purpose: Client acknowledges they will exercise their own judgement.
4. Understanding of Market Risk
"(i) Any investment made based on the recommendations in the research report are subject to market risk."
Purpose: Client understands investments are subject to market risk.
5. No Assurance of Returns
"(ii) Recommendations in the research report do not provide any assurance of returns."
Purpose: Client understands there is no assurance of returns.
6. No Recourse for Losses
"(iii) There is no recourse to claim any losses incurred on the investments made based on the recommendations in the research report."
Purpose: Client understands there is no recourse for losses.
RA Declaration
In addition to the client acknowledgment, the RA must provide a declaration:
Exact Wording
"Research analyst or research entity shall provide the following declaration to the client:
(i) It is duly registered with SEBI as an RA pursuant to the SEBI (Research Analysts) Regulations, 2014 and its registration details are: (registration number, registration date);
(ii) It has registration and qualifications required to render the services contemplated under the RA Regulations, and the same are valid and subsisting;
(iii) Research analyst services provided by it do not conflict with or violate any provision of law, rule or regulation, contract, or other instrument to which it is a party or to which any of its property is or may be subject;
(iv) The maximum fee that may be charged by RA is ₹1.51 lakhs per annum per family of client.
(v) The recommendations provided by RA do not provide any assurance of returns.
Additionally, if RA is an individual, declaration that:
(i) It is not engaged in any additional professional or business activities, on a whole-time basis or in an executive capacity, which interfere with/influence or have the potential to interfere with/influence the independence of research report and/or recommendations contained therein."
Compliance Requirements
1. Client Acknowledgment
Obtain client acknowledgment in the standard format.
2. RA Declaration
Provide RA declaration to the client.
3. Consent
Obtain client consent on the terms and conditions.
4. Record Keeping
Maintain records of acknowledgment and consent.
5. Updation
Update terms as required.
Common Compliance Gaps
1. Not Obtaining Client Acknowledgment
Some RAs do not obtain the standard acknowledgment.
Solution: Obtain acknowledgment in the standard format.
2. Not Providing RA Declaration
Some RAs do not provide the RA declaration.
Solution: Provide the RA declaration.
3. Incomplete Consent
Some RAs obtain incomplete consent.
Solution: Ensure full consent.
4. No Records
Some RAs fail to maintain records.
Solution: Maintain records of acknowledgment and consent.
Conclusion and How Anuj Desai & Associates Can Help
The Standard Terms of Service client acknowledgment is a critical compliance requirement. Proper acknowledgment and consent collection protect both the RA and the client.
Anuj Desai & Associates offers specialized services to help RAs comply with Standard Terms of Service requirements:
- Review of acknowledgment documentation.
- Assistance with consent collection.
- Compliance audit and advisory.
Contact us today to ensure your Standard Terms of Service comply with SEBI requirements. Our team will review your documentation and provide a tailored compliance roadmap.
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.