The Securities and Exchange Board of India (SEBI) on August 07, 2023, issued FAQs on SEBI Registered Investment Advisers.
The following FAQs are as follows:
• Are IAs regulated in India?
SEBI notified the IA Regulations on January 21, 2013. These Regulations came into effect on April 21, 2013, and specify the conditions for registration, certification, capital adequacy, risk profiling and suitability, disclosures to be made, code of conduct, records to be maintained, manner of conducting an inspection, etc. pertaining to IAs.
• Who is an IA?
The term “investment adviser” is defined in the IA Regulations and means any person, who for consideration, is engaged in the business of providing investment advice to clients or other persons or groups of persons and includes any person who holds out himself as an investment adviser, by whatever name called.
• Who is required to apply for a certificate of registration as an IA?
On and from the date of commencement of the IA Regulations, a person can act as an IA or hold himself out as an IA only if he has obtained a certificate of registration from SEBI or has been specifically exempted from obtaining such a certificate.
A sole proprietor can also apply for a certificate of registration as an IA. Such application will be processed in the same manner as an individual applicant.
The IA Regulations provide for exemption to certain persons such as insurance agents, pension advisers, mutual fund distributors, stock brokers, portfolio managers, fund managers, advocates, solicitors, law firms, etc. from obtaining a certificate of registration as an IA subject to fulfilment of stipulated conditions.
• How should a bank or NBFC proposing to undertake investment advisory services apply for a certificate of registration as an IA?
A bank or NBFC proposing to undertake investment advisory services is required to first obtain permission from the Reserve Bank of India and then make an application for a certificate of registration under the IA Regulations through a subsidiary or separately identifiable department or division.
