Under Regulation 25 of SEBI (Research Analysts) Regulations, 2014, for what minimum period must all research records and client communications be preserved, and who must conduct the mandatory annual compliance audit?

[ A ]Preserved for a minimum period of five (5) years in physical or digitally signed electronic form; an annual compliance audit must be conducted by a member of ICAI (Chartered Accountant), ICSI (Company Secretary), or ICWAI/ICMAI (Cost Accountant).[ CORRECT ]

[ B ]Preserved for exactly 30 days and audited by the local municipal corporator.

[ C ]Preserved for 100 years and audited exclusively by the Supreme Court Chief Justice.

[ D ]Records can be destroyed immediately after publishing a report, with zero audit requirements.

Takeaway

Option A is correct: Preserved for a minimum period of five (5) years in physical or digitally signed electronic form; an annual compliance audit must be conducted by a member of ICAI (Chartered Accountant), ICSI (Company Secretary), or ICWAI/ICMAI (Cost Accountant).

Derivation

Regulation 25 mandates rigorous record-keeping and independent auditing for research analysts: (1) Record Retention: All signed research reports, underlying research rationales, records of public appearances, client KYC records, client registers with PAN and fee details, and written/electronic communication logs (emails, call recordings) must be preserved in physical or digitally signed electronic format for a minimum period of five (5) years. (2) Annual Audit: Research analysts and entities must conduct an annual compliance audit from an independent practicing professional—a member of ICAI, ICSI, or ICWAI (Cost Accountant)—and report findings to SEBI. This tests Regulation 25 compliance obligations. The common trap is recalling a 3-year or 8-year retention window.

Why the others fail

B — Preserved for exactly 30 days and audited by the local municipal corporator.

A 30-day retention period violates SEBI's statutory 5-year preservation mandate, and municipal corporators have no audit authority.

C — Preserved for 100 years and audited exclusively by the Supreme Court Chief Justice.

100-year preservation is an absurd exaggeration, and Supreme Court justices do not conduct corporate intermediary compliance audits.

D — Records can be destroyed immediately after publishing a report, with zero audit requirements.

Destroying research records violates SEBI regulations and exposes the analyst to immediate registration cancellation and prosecution.