SEBI Guidance on RA Fee Cap for Individual and HUF Clients

Informal Guidance No. SEBI/HO/MIRSD-POD/P/OW/2025/25279/1, Dated 24.09.2025

1. Introduction

The Securities and Exchange Board of India (SEBI) has issued an interpretive letter under the Informal Guidance Scheme, 2003 in response to a query raised by Equitymaster Research Pvt. Ltd. The letter provides clarity on the scope and applicability of fee-related provisions introduced under the Research Analyst (RA) Regulations earlier this year.

2. Clarification on Fee Cap

SEBI clarified that the annual fee cap of ₹1,51,000 per family, which came into effect on 8 January 2025, is applicable to all individual and Hindu Undivided Family (HUF) clients, without exception. This means that even existing clients of research analysts fall within the ambit of the new fee cap, thereby standardising charges across both new and ongoing relationships.

3. Compliance Requirements for Research Analysts

The interpretive letter further reiterates that Research Analysts (RAs) must comply with the fee-related provisions specified under the RA Regulations. This includes the obligation to ensure that fees collected from clients do not breach the prescribed cap, and that fee structures are transparent and compliant with the regulatory framework.

4. Refund of Advance Fees

One of the key compliance requirements highlighted by SEBI is the refund of advance fees collected by research analysts beyond a period of one year. This ensures that clients are not charged excessively in advance and that the fee structure remains fair and proportionate to the services provided. SEBI directed that research analysts were required to align with these provisions by 30 June 2025, giving them a clear compliance timeline.

5. Conclusion

Through this interpretive letter, SEBI has provided much-needed clarity on the implementation of fee-related provisions under the RA Regulations. By extending the ₹1,51,000 per family cap to all clients, including existing ones, and mandating refunds of excess advance fees, SEBI has reinforced its commitment to investor protection and fair market practices. The guidance ensures consistency, compliance, and greater transparency in the research analyst industry, strengthening trust between analysts and their clients.

Click Here To Read The Full Update