SEBI notifies Amendments to SEBI (Investment Advisers) Regulations, 2013 - (03 Jul 2020)
Capital Market
SEBI has notified amendments to SEBI (Investment Advisers) Regulations, 2013. Amendments are intended to strengthen the regulatory framework for investment advisers. SEBI had issued a Consultation Paper, in January 2020, on Review of Regulatory Framework for Investment Advisers, and sought comments from the public on the proposals. The key regulatory changes include segregation of Advisory & Distribution Activities at client level to avoid conflict of interest. An individual shall have the option to register as an Investment Adviser or provide distribution services as a distributor. A non-individual investment adviser shall have client level segregation at group level for investment advisory and distribution services and maintain an arm’s length relationship between its activities by providing advisory services through a separately identifiable department or division.
Further, Investment Advisers are allowed to provide implementation services (Execution) through direct schemes/ products in the securities market. However, no consideration can be received directly or indirectly, at investment adviser’s group or family level for these services. Mandatory agreement is to be entered between Investment Adviser and the client for ensuring greater transparency with reference to advisory activities.
The fee charged by the Investment Adviser for providing Investment Advice from a client shall be in the manner as specified by SEBI. Enhanced eligibility criteria for registration as an Investment Adviser includes net worth of Rs.50 lakhs for non-individuals and Rs.5 lakhs for individuals. Individuals registered as investment advisers whose number of clients exceed 150 in total, shall apply for registration with SEBI as non-individual investment adviser.
Tags : AMENDMENT REGULATION INVESTMENT ADVISERS
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