Most Important Terms and Conditions (MITC) for Research Analysts
Summary
This circular mandates Research Analysts to disclose standardized Most Important Terms and Conditions (MITC) to clients as per SEBI regulations. It requires RAs to inform existing clients of these terms by June 30, 2025, and incorporate them into their service agreements immediately. The annexure details specific prohibitions on guaranteed returns, fee caps for individual clients, and strict confidentiality regarding client credentials.
Text
In terms of Regulation 24(6) of the SEBI (Research Analysts) Regulations, 2014, an RA is required to disclose the terms and conditions of research services to the clients and take consent of the clients thereon.
The MITC for the services of RAs, as standardized by the Industry Standards Forum (‘ISF’) for Research Analysts in consultation with RAASB and SEBI is placed at Annexure A.
For existing clients, the MITC shall be informed by the RAs to their clients via email or any other suitable mode of communication (which can be preserved) by June 30, 2025.
RAs shall incorporate the MITC into the ‘Terms and Conditions’ of providing research services and shall disclose the ‘Terms and Conditions’ to the clients and take consent thereon.
The provisions of this circular shall come into force with immediate effect.
This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Regulation 24 (6) of the RA Regulations.
RA cannot execute/carry out any trade (purchase/sell transaction) on behalf of, the client. Thus, the clients are advised not to permit RA to execute any trade on their behalf.
The fee charged by RA to the client will be subject to the maximum of amount prescribed by SEBI/ Research Analyst Administration and Supervisory Body (RAASB) from time to time (applicable only for Individual and HUF Clients).
The current fee limit is Rs 1,51,000/- per annum per family of client for all research services of the RA.
RA may charge fees in advance if agreed by the client. Such advance shall not exceed the period stipulated by SEBI; presently it is one quarter. In case of pre-mature termination... the client shall be entitled to seek refund of proportionate fees only for unexpired period.
Fees to RA may be paid by the client through any of the specified modes like cheque, online bank transfer, UPI, etc. Cash payment is not allowed.
The RA is required to abide by the applicable regulations/ circulars/ directions specified by SEBI and RAASB from time to time in relation to disclosure and mitigation of any actual or potential conflict of interest.
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Source: SecMarx — Most Important Terms and Conditions (MITC) for Research Analysts. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.