Sebi asks investment advisers to get registration certificate by October 21


Sebi asks investment advisers to get registration certificate by October 21


Market regulator Securities and Exchange Board of India (Sebi) on Wednesday directed all investment advisers to get registered with itself by October 21 to continue their services.

Sebi in a notification in January had made it compulsory for investment advisers to first obtain a certificate of registration for the same in a move to weed out unauthorised entities giving advice to investors.

“All the persons acting as an investment adviser before the commencement of Investment Advisers Regulations are advised to make their application for grant of registration before October 21, 2013 to continue to do so,” Sebi said in a statement.

It also said that the advisors “shall comply with the requirement of obtaining a certificate of registration for acting as investment adviser under the IA regulations”.

As a part of its efforts to make it convenient for genuine entities to get the registration, Sebi has allowed filing applications with its regional and local offices across the country.

The regulator said the applicant seeking to act as an investment adviser should make an application to Sebi in a prescribed format along with the necessary supporting documents like details of the investment advice provided.

As per the regulation, Sebi made it mandatory for investment advisers to register with the capital markets regulator and also require them to disclose all issues that could result in conflict of interests, among others.

“…no person shall act as an investment adviser or hold itself out as an investment adviser unless he has obtained a certificate of registration from the Board or he is specifically exempt,” Sebi noted.

“Provided that a person acting as an investment adviser immediately before the commencement of these regulations may continue to do so for a period of six months from such commencement or, if it has made an application for a certificate within the said period of six months, till the disposal of such application,” it added.

To ensure more transparency, the new regulations require investment advisers – banks, non-banking financial companies (NBFCs) and corporates – would have to segregate their investment advisory services from other activities.

Investment advisers also have to disclose the fee received for their advice on a particular financial product.

Sebi said all entities engaged in advising on financial products would need to get registered with it. Besides, the investment advisers need to separate this activity from all other activities such as distribution.

To be an investment adviser, corporate bodies need to have a minimum worth of Rs. 25 lakh while the threshold level would be Rs. 1 lakh for individuals.


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