SEBI amended Investment Advisers Regulations 2013
SEBI has notified the Securities and Exchange Board of India (Investment Advisers) (Amendment) Regulations, 2020.
Unless registered with the SEBI as “Investment Adviser”, no person, while dealing in distribution of securities, allowed to use the nomenclature “Independent Financial Adviser or IFA or Wealth Adviser or any other similar name”
It has been provided that in case the applicant is an individual, he and all persons associated with investment advice are appropriately qualified and certified. In case the applicant is a body corporate, the principal officer and all persons associated with investment advice of the applicant are appropriately qualified and certified as specified. Similar has been provided for firms / LLP
Qualification and certification requirement has also been amended. Minimum qualifications has also been prescribed for persons associated with investment advice.
Networth requirements has been enhanced for non-individuals to fifty lakh rupees and five lakh rupees for individuals.
Individuals registered as investment advisers whose number of clients exceed one hundred and fifty in total, shall apply for registration as non-individual investment adviser within time specified by the SEBI.
Regulations related to Client level segregation of advisory and distribution activities has been amended. An individual investment adviser shall not provide distribution services. he family of an individual investment adviser shall not provide distribution services to the client advised by the individual investment adviser and no individual investment adviser shall provide advice to a client who is receiving distribution services from other family members
Implementation of advice or execution. Investment adviser may provide implementation services to the advisory clients in securities market subject to that investment advisers shall ensure that no consideration / commission or referral fees, etc. is received at investment adviser’s group or family level. Investment adviser shall provide implementation services to its advisory clients only through direct schemes/products in the securities market.
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