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Are You Dealing With SEBI Registered Adviser?


Its nearly a month now,SEBI has come with the regulations for investment advisers imposing certain requirements for individuals or firms to work as investment advisers.

These regulations were published on Jan 21 , 2013 & will come in to force on 90th day from the date of publication.

Summary of important provisions for Investment Adviser Regulations:

  1. Certificate Of Registration – Its mandatory for investment advisers to obtain registration certificate from SEBI. Validity of registration of certification is 05 years.
  2. Qualification – A professional qualification or P.G degree / PG diploma – Finance,accountancy,business management,economics,commerce, banking,insurance,actuarial science from recognized institutes OR Graduate Degree with experience of minimum 5 years in activities related to the financial product advice.
  3. In addition, its mandatory to have related certification from NISM or NISM accredited institutes or stock exchanges.
  4. Compliance officer – Appointment of compliance officer is mandatory for properitery firms.
  5. Capital Adequacy –For body corporates minimum requirement of net worth is Rs.25 lakh while for individuals / partnership firms it is 1 lakh.
  6. Beside,investment advisers will have general responsibilities & obligations like  undertaking proper Risk Profiling of clients,investment period,disclose conflict of interests.
  7. Investment advisers need to maintain the yearly records & subject to yearly audit from CA or company secretary.

There are very few fee only financial planners in India..Till recent regulations to come,for number of  planners it was a double dose of income – brokerage + fee on advice.

Very few financial planners have preferred to write on Direct Plans introduced by mutual funds….which endorse the fact that most of planners are involved in the selling of mutual funds…& so directly there is a conflict of interest.

But after the regulations have come up planners need to select only one profession or they need to separate both the businesses.So these regulations are in favor of investors & we can expect some good out come of it …isn’t it?

Click To View SEBI Regulations about investment adviers


Category: Mutual Funds

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Information provided on this blog is for general purpose only & not investment advice.Please take advice of SEBI Registered Investment Advisors before taking any investment decision.
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