{"id":13004,"date":"2021-06-22T21:45:29","date_gmt":"2021-06-22T16:15:29","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=13004"},"modified":"2024-05-29T18:49:45","modified_gmt":"2024-05-29T13:19:45","slug":"sebi-investment-advisors-amendment-regulations-2020","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/sebi-investment-advisors-amendment-regulations-2020\/","title":{"rendered":"SEBI Investment Advisors\u2019 Amendment Regulations 2020"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d308236dd3f\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d308236dd3f\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/sebi-investment-advisors-amendment-regulations-2020\/#OVERVIEW_ON_SEBI_INVESTMENT_ADVISORS_AMENDMENT\" title=\"OVERVIEW ON SEBI INVESTMENT ADVISORS\u2019 AMENDMENT\">OVERVIEW ON SEBI INVESTMENT ADVISORS\u2019 AMENDMENT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/sebi-investment-advisors-amendment-regulations-2020\/#HIGHLIGHTS_OF_THE_SEBI_INVESTMENT_ADVISORS_AMENDMENT\" title=\"HIGHLIGHTS OF THE SEBI INVESTMENT ADVISORS\u2019 AMENDMENT\">HIGHLIGHTS OF THE SEBI INVESTMENT ADVISORS\u2019 AMENDMENT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/sebi-investment-advisors-amendment-regulations-2020\/#ELIGIBILITY_CRITERIA_SEBI_INVESTMENT_ADVISORS\" title=\"ELIGIBILITY CRITERIA SEBI INVESTMENT ADVISORS\u2019\">ELIGIBILITY CRITERIA SEBI INVESTMENT ADVISORS\u2019<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/sebi-investment-advisors-amendment-regulations-2020\/#SEGREGATION_OF_ADVISORY_AND_DISTRIBUTION_ACTIVITIES\" title=\"SEGREGATION OF ADVISORY AND DISTRIBUTION ACTIVITIES\">SEGREGATION OF ADVISORY AND DISTRIBUTION ACTIVITIES<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/sebi-investment-advisors-amendment-regulations-2020\/#INVESTMENT_ADVISORS_OFFER_IMPLEMENTATION_SERVICES\" title=\"INVESTMENT ADVISORS OFFER IMPLEMENTATION SERVICES\">INVESTMENT ADVISORS OFFER IMPLEMENTATION SERVICES<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/sebi-investment-advisors-amendment-regulations-2020\/#AGREEMENT_BETWEEN_INVESTMENT_ADVISORS_AND_CLIENT\" title=\"AGREEMENT BETWEEN INVESTMENT ADVISORS AND CLIENT\">AGREEMENT BETWEEN INVESTMENT ADVISORS AND CLIENT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/sebi-investment-advisors-amendment-regulations-2020\/#FEES_TO_BE_CHARGED_BY_THE_ADVISER\" title=\"FEES TO BE CHARGED BY THE\u00a0ADVISER\u00a0\">FEES TO BE CHARGED BY THE\u00a0ADVISER\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/sebi-investment-advisors-amendment-regulations-2020\/#AUDIT_COMPLIANCE_REPORT\" title=\"AUDIT COMPLIANCE REPORT\">AUDIT COMPLIANCE REPORT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/sebi-investment-advisors-amendment-regulations-2020\/#SUMMARY_ON_INVESTMENT_ADVISERS_AMENDMENT\" title=\"SUMMARY ON INVESTMENT ADVISERS AMENDMENT\">SUMMARY ON INVESTMENT ADVISERS AMENDMENT<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/sebi-investment-advisors-amendment-regulations-2020\/#Client_agreement_Annual_Compliance\" title=\"Client agreement &amp; Annual Compliance\u00a0\">Client agreement &amp; Annual Compliance\u00a0<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/carajput.com\/blog\/sebi-investment-advisors-amendment-regulations-2020\/#CONCLUSION\" title=\"CONCLUSION\">CONCLUSION<\/a><\/li><\/ul><\/nav><\/div>\n<p><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/RIA.png\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-13007\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/RIA.png\" alt=\"RIA\" width=\"970\" height=\"485\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/RIA.png 800w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/RIA-300x150.png 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/RIA-768x384.png 768w\" sizes=\"(max-width: 970px) 100vw, 970px\" \/><\/a><\/p>\n<p>The Securities Exchange Board of India recently issued a notice under PR No. 37\/2020 providing for the amendments to the SEBI (Investment Advisors) Regulations, 2013. The Investment advisor\u2019s amendment is aimed to strengthen the regulatory framework for <a href=\"https:\/\/carajput.com\/blog\/know-about-foreign-direct-investment-in-india\/\">investment<\/a> advisors.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"OVERVIEW_ON_SEBI_INVESTMENT_ADVISORS_AMENDMENT\"><\/span><span style=\"color: #000080;\"><strong>OVERVIEW ON<a href=\"https:\/\/www.caindelhiindia.com\/blog\/sebi-investment-advisors-amendment-regulations-2020\/\"> SEBI INVESTMENT ADVISORS\u2019 AMENDMENT<\/a><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>In India, the investment advisers are regulated and monitored by the Securities and Exchange Board of India (Investment Advisers) Regulations, 2013.<\/li>\n<li>These regulations specify conditions related to the registration, certification, capital adequacy, risk profiling and suitability, disclosures to be made, code of conduct, records to be maintained, manner of conducting inspection etc. with\u00a0relevance\u00a0IAs. Vide its gazette notification of July 03, 2020, the Securities and Exchange Board of India <a href=\"https:\/\/carajput.com\/blog\/tag\/rbi\/\">(SEBI<\/a>) has notified amendments\u00a0to those\u00a0Principal Regulations.<\/li>\n<li>Earlier, in January, the Securities and Exchange Board of India had floated a consultation paper on review of the regulatory framework for investment advisors and asked for public comments\u00a0thereon. The consultation paper had created speculations among the RIA community concerning\u00a0the very fact\u00a0of how this new regulatory regime would come forth, considering the challenging and competitive environment.<\/li>\n<li>In January 2020, SEBI had issued a consultation paper on review of regulatory framework for IAs and sought comments from\u00a0the general public\u00a0and stakeholders on the proposed changes. Such a paper was issued, in order to provide a clear segregation between advisory, distribution and execution services provided to a client by IAs.<\/li>\n<li>On 3rd July, the speculations were put to rest when the market regulator (SEBI) came out with\u00a0the ultimate\u00a0version of the amendment to SEBI Investment Advisors Regulations, 2013.<\/li>\n<li>The notification states that the amendments are slated\u00a0to come back\u00a0into force on the nineteenth day from the date of publication\u00a0within the\u00a0official gazette. The amendments are expected to further strengthen the regulatory framework for Investment advisors.<\/li>\n<li>In the past, it was seen that the distribution and execution services were being used interchangeably, without any significant differentiation. After considering these issues in its consultation paper, SEBI has approved the proposals on regulatory changes and accordingly notified the SEBI (Investment Advisers) (Amendment) Regulations, 2020 (\u201cAmendment Regulations \u201c).<\/li>\n<li>Thus, these amendments thereby provide for greater clarity on the segregation of advisory services from distribution services and distinguish between distribution and execution services.<\/li>\n<li>The Amendment Regulations shall\u00a0inherit\u00a0force on the ninetieth day from the day of their publication\u00a0within the\u00a0official gazette (i.e., July 03, 2020).\u00a0this text\u00a0aims to briefly summarize the key regulatory changes, which\u00a0are\u00a0introduced by way of the Amendment Regulations.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"HIGHLIGHTS_OF_THE_SEBI_INVESTMENT_ADVISORS_AMENDMENT\"><\/span><span style=\"color: #000080;\"><strong>HIGHLIGHTS OF THE SEBI INVESTMENT ADVISORS\u2019 AMENDMENT<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The main points as provided in the amendments to SEBI (Investment Advisors) Regulations are as follows:<\/p>\n<p><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/SEBI-INVESTMENT-ADVISORS-AMENDMENT-REGULATIONS-2020.png\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-13005\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/SEBI-INVESTMENT-ADVISORS-AMENDMENT-REGULATIONS-2020.png\" alt=\"SEBI INVESTMENT ADVISORS\u2019 AMENDMENT REGULATIONS 2020\" width=\"1000\" height=\"600\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/SEBI-INVESTMENT-ADVISORS-AMENDMENT-REGULATIONS-2020.png 1000w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/SEBI-INVESTMENT-ADVISORS-AMENDMENT-REGULATIONS-2020-300x180.png 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/SEBI-INVESTMENT-ADVISORS-AMENDMENT-REGULATIONS-2020-768x461.png 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/SEBI-INVESTMENT-ADVISORS-AMENDMENT-REGULATIONS-2020-800x480.png 800w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><\/a><\/p>\n<h3><span class=\"ez-toc-section\" id=\"ELIGIBILITY_CRITERIA_SEBI_INVESTMENT_ADVISORS\"><\/span><span style=\"color: #000080;\"><strong>ELIGIBILITY CRITERIA SEBI INVESTMENT ADVISORS\u2019<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li>Enhanced eligibility criteria for <a href=\"https:\/\/carajput.com\/blog\/tag\/sebi\/\">registration<\/a> as a\u00a0consultant\u00a0including net worth of Rs.50 lakhs for non-individuals and Rs. 5 lakhs\u00a0for people.<\/li>\n<li>Individual\u00a0adviser\u00a0or a principal officer of a non-individual\u00a0consultant\u00a0to possess\u00a0enhanced professional or post-graduate qualification in relevant subjects and relevant experience\u00a0of 5\u00a0years while grandfathering existing Individual Investment Advisers from complying with\u00a0the improved\u00a0qualification\u00a0and knowledge\u00a0as specified by SEBI.<\/li>\n<li>Individuals registered as investment advisers whose number of clients exceed 150 in total, shall apply for registration with SEBI as non-individual\u00a0consultant.<\/li>\n<\/ol>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>The investment advisors\u2019 eligibility criteria consist of the qualification along with the net worth requirements. SEBI has amended the qualification and net worth requirement with the Investment advisor\u2019s amendment.<\/li>\n<li>Eligibility criteria for registering as\u00a0adviser\u00a0has been enhanced with a net worth\u00a0of fifty\u00a0lakh rupees for non-individuals and 5 lakh rupees\u00a0for people.<\/li>\n<li>The individual consultants or principal officers of a non-individual investment advisor to own enhanced professional or postgraduate qualification in relevant subjects.<\/li>\n<li>Relevant experience\u00a0of 5\u00a0years\u00a0is additionally\u00a0required while grandfathering exiting individual investment advisors from complying with\u00a0the improved\u00a0qualification\u00a0and skill\u00a0as prescribed by the SEBI.<\/li>\n<li>The necessity\u00a0of certification in financial planning remains\u00a0the identical.<\/li>\n<li>In case where\u00a0a personal\u00a0registered as\u00a0a personal\u00a0consultant\u00a0has over 150 clients, then\u00a0he&#8217;s\u00a0required to\u00a0choose\u00a0non-individual\u00a0adviser\u00a0registration.<\/li>\n<li>It is also to be noted, that the Securities and Exchange Board of India inserted regulation 3(3), prohibiting anyone except investment advisors registered with SEBI dealing\u00a0within the\u00a0distribution of securities, to use \u201cIndependent Financial Advisor\u201d or wealth advisor or such other name.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"SEGREGATION_OF_ADVISORY_AND_DISTRIBUTION_ACTIVITIES\"><\/span><span style=\"color: #000080;\"><strong>SEGREGATION OF ADVISORY AND DISTRIBUTION ACTIVITIES<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>As per the regulation 15 (5) of the Investment Regulations, all the Investment advisors are required to disclose all conflict of interest that pops up while advising its clients.<\/li>\n<li>There\u00a0are often\u00a0instances where the investment advisors would advise\u00a0to take a position\u00a0in products that fetch maximum commission. So\u00a0so as\u00a0to beat\u00a0such a situation, investment advisors are required to disclose conflict of interests.<\/li>\n<li>Segregation of Advisory and Distribution Activities to be at the client level with a view to avoiding conflict of interest.<\/li>\n<li>The individual\u00a0adviser\u00a0to possess\u00a0a\u00a0choice to\u00a0register as an\u00a0adviser\u00a0or has\u00a0the choice\u00a0to supply\u00a0distribution services as a distributor.<\/li>\n<li>In case where a non-individual\u00a0investment adviser\u00a0contains a\u00a0clear mechanism, and he also maintains an arm\u2019s length relationship between advisory and distribution services, he can continue with both.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"INVESTMENT_ADVISORS_OFFER_IMPLEMENTATION_SERVICES\"><\/span><a href=\"https:\/\/www.caindelhiindia.com\/blog\/sebi-investment-advisors-amendment-regulations-2020\/\"><span style=\"color: #000080;\"><strong>INVESTMENT ADVISORS OFFER IMPLEMENTATION SERVICES<\/strong><\/span><\/a><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Investment advisors offer implementation services to their clients,\u00a0which implies\u00a0the execution\u00a0of recommendation\u00a0provided to the client by charging reasonable consideration.<\/li>\n<li>SEBI has emphasized\u00a0the very fact\u00a0that whether to avail implementation services\u00a0are going to be\u00a0supported\u00a0the selection\u00a0of the client,\u00a0and therefore the\u00a0investment advisors cannot force its clients to avail the services.<\/li>\n<li>As per the Investment advisor\u2019s amendment, Investment advisors are permitted\u00a0to produce\u00a0implementation services (Execution) through direct schemes or products\u00a0within the\u00a0stock market. However,\u00a0it should\u00a0be noted that no consideration\u00a0will be\u00a0received either directly or indirectly at the investment advisor\u2019s group or family for these services.<\/li>\n<li>Investment advisors or group or family of investment advisors cannot charge any consideration, including commission or referral fees for giving implementation services.<\/li>\n<li>SEBI has mandated the investment advisors\u00a0to supply\u00a0a declaration that no consideration shall be charged for implementation services.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"AGREEMENT_BETWEEN_INVESTMENT_ADVISORS_AND_CLIENT\"><\/span><span style=\"color: #000080;\"><strong>AGREEMENT BETWEEN INVESTMENT ADVISORS AND CLIENT<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Under regulation 19, a\u00a0consultant\u00a0is required\u00a0to keep up\u00a0a duplicate\u00a0of the agreement with the client with other records prescribed under the regulation.\u00a0the necessity\u00a0of the agreement\u00a0wasn&#8217;t\u00a0mandatory under the erstwhile regulations; therefore,\u00a0many consumers\u00a0weren&#8217;t\u00a0attentive to\u00a0the terms and conditions of the advisory services that they received from investment advisors.<\/p>\n<p>SEBI also received numerous complaints against investment advisors regarding their unfair practices\u00a0like\u00a0charging high advisory fees, promising false returns, non-disclosure of fees, etc. Moreover,\u00a0within the\u00a0case where\u00a0there&#8217;s\u00a0no agreement between advisor and clients, the client\u00a0might not\u00a0be\u00a0able to\u00a0prove his claim.<\/p>\n<p>Hence, now\u00a0there&#8217;s\u00a0a requirement for mandatory agreement between investment advisors and clients.\u00a0it&#8217;ll\u00a0help in ensuring greater transparency in advisory activities. A circular concerning minimum mandatory term to be incorporated\u00a0within the\u00a0agreement is awaited.<\/p>\n<p>For details refer to the circular:<\/p>\n<p><strong><a href=\"https:\/\/carajput.com\/press-releases\/sebi-has-extended-the-date-from-30-june-to-15-sept-2020-for-filing-of-financial-results.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">SEBI has extended the date from 30 June to 15 Sept 2020 for the filing of financial results<\/a><\/strong><\/p>\n<p><strong><a href=\"https:\/\/carajput.com\/archives\/amendments-in-sebi-listing-obligations-and-disclosure-requirements-regulations-2015.pdf\">Amendments in SEBI -Listing Obligations and Disclosure Requirements Regulations 2015<\/a><\/strong><\/p>\n<h3><span class=\"ez-toc-section\" id=\"FEES_TO_BE_CHARGED_BY_THE_ADVISER\"><\/span><span style=\"color: #000080;\"><strong>FEES TO BE CHARGED BY THE\u00a0ADVISER\u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The fee to be charged by the\u00a0adviser\u00a0shall be as per\u00a0the way\u00a0prescribed by the Securities Exchange Board of India. The circular regarding\u00a0the identical\u00a0is awaited.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"AUDIT_COMPLIANCE_REPORT\"><\/span><span style=\"color: #000080;\"><strong>AUDIT COMPLIANCE REPORT<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>It is provided that the required audit compliance will be required to be submitted with the Securities and Exchange Board of India.<\/li>\n<li>A circular concerning the timeline of\u00a0the identical\u00a0is awaited.\u00a0this alteration\u00a0within the\u00a0annual compliance audit requirement was essential as\u00a0this can be\u00a0the sole\u00a0report submission of which has been made necessary for an RIA.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"SUMMARY_ON_INVESTMENT_ADVISERS_AMENDMENT\"><\/span><span style=\"color: #000080;\"><strong>SUMMARY ON INVESTMENT ADVISERS <\/strong><\/span><span style=\"color: #000080;\"><strong>AMENDMENT<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Following are the key highlights:<\/p>\n<ul>\n<li>Eligibility criteria for registration as an\u00a0investment advisor\u00a0including net worth of Rs. 50 lakhs for non-individuals and Rs. 5 lakhs\u00a0for people<\/li>\n<li>Segregation of Advisory &amp; Distribution Activities at client level to avoid conflict of interest.<\/li>\n<li>For individual\u00a0investment adviser\u00a0there&#8217;s\u00a0a\u00a0choice to\u00a0register as an\u00a0investment advisor\u00a0or provide distribution services as a distributor.<\/li>\n<li>If a non-individual\u00a0adviser\u00a0incorporates a\u00a0clear mechanism and also, he maintains an arm\u2019s length relationship between advisory and distribution services, he can continue with both.<\/li>\n<li>Investment Advisers are allowed\u00a0to supply\u00a0implementation services (Execution) through direct schemes\/ products\u00a0within the\u00a0stock exchange. However, no consideration\u00a0is\u00a0received directly or indirectly, at investment adviser\u2019s group or family level for these services.<\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Client_agreement_Annual_Compliance\"><\/span><span style=\"color: #000080;\"><strong>Client agreement &amp; Annual Compliance\u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li>Mandatory Client agreement between the Advisor and client<\/li>\n<li>Annual Compliance Audit to be mandatorily submitted to SEBI<\/li>\n<li>Fee charge by investor advisor shall be as per\u00a0the way\u00a0prescribed by SEBI<\/li>\n<li>If\u00a0a private\u00a0registered as\u00a0a private\u00a0adviser\u00a0has\u00a0over\u00a0150 clients, then he will\u00a0must\u00a0go for\u00a0non-individual\u00a0adviser\u00a0registration<\/li>\n<li>Individual\u00a0adviser\u00a0or a principal officer of a non-individual\u00a0investment advisor\u00a0to own\u00a0enhanced professional or post-graduate qualification in relevant subjects and relevant experience\u00a0of 5\u00a0years while grandfathering existing Individual Investment Advisers from complying with\u00a0the improved\u00a0qualification\u00a0and skill\u00a0as specified by SEBI<\/li>\n<\/ul>\n<p><strong>Fraud Alert<\/strong><strong> :\u00a0<\/strong>Before dealing with any Investment Advisor, please check whether it is registered with SEBI. Don\u2019t deal with unregistered Investment Advisors.\u00a0Link for verification of registered investment advisors:\u00a0<a href=\"https:\/\/nse.email-messaging.com\/tracking\/1\/click\/aEmG5vrujWGVQP2Lnq-Sz7EkFUC8KYjnm64ReJUzOr8=\" target=\"_blank\" rel=\"noopener\" data-saferedirecturl=\"https:\/\/www.google.com\/url?q=https:\/\/nse.email-messaging.com\/tracking\/1\/click\/aEmG5vrujWGVQP2Lnq-Sz7EkFUC8KYjnm64ReJUzOr8%3D&amp;source=gmail&amp;ust=1717068867415000&amp;usg=AOvVaw2MWLa6BhstaLYdeSHh0xJv\">https:\/\/www.sebi.gov.in\/<wbr \/>sebiweb\/other\/OtherAction.do?<wbr \/>doRecognisedFpi=yes&amp;intmId=13<\/a><\/p>\n<h3><span class=\"ez-toc-section\" id=\"CONCLUSION\"><\/span><span style=\"color: #ff6600;\"><strong>CONCLUSION<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>The <a href=\"https:\/\/www.caindelhiindia.com\/blog\/sebi-investment-advisors-amendment-regulations-2020\/\">SEBI Investment Advisors Amendment<\/a> is anticipated to control the role of Investment advisors, and therefore the glaring gaps that were visible earlier are expected to be full of these amendments.<\/li>\n<li>Apart from the key regulatory changes as described above, Regulation 7 has been amended\u00a0to produce\u00a0for enhanced professional or post-graduate qualifications of the IA or a principal officer of a non-individual IA, being registered as an IA under the relevant subjects along with relevant experience. However, these qualification requirements shall not apply to such existing IAs as\u00a0is also\u00a0specified by SEBI.<\/li>\n<li>The Amended Regulations also make further amendments\u00a0to create\u00a0A in First Schedule of the Principal Regulations, which\u00a0handle\u00a0application for grant of certificate of registration\/renewal as an IA. Vide its\u00a0release\u00a0dated July 03, 2020,<\/li>\n<li>SEBI has clarified that\u00a0the rules\u00a0coping with\u00a0various other issues like key terms and conditions of investment advisory services agreement, modes of charging fee, periodicity etc.\u00a0are\u00a0separately specified through a circular.<\/li>\n<\/ul>\n<p>Also Read<\/p>\n<p><a href=\"https:\/\/carajput.com\/blog\/apeda-rcmc-registration-meaning-benefits-documents-required-and-so-on-for-an-apeda-license\/\">Application for APEDA (RCMC) Registration<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Securities Exchange Board of India recently issued a notice under PR No. 37\/2020 providing for the amendments to the SEBI (Investment Advisors) Regulations, 2013. The Investment advisor\u2019s amendment is aimed to strengthen the regulatory framework for investment advisors. OVERVIEW ON SEBI INVESTMENT ADVISORS\u2019 AMENDMENT In India, the investment advisers are regulated and monitored by &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[9953],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/13004"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=13004"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/13004\/revisions"}],"predecessor-version":[{"id":22068,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/13004\/revisions\/22068"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=13004"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=13004"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=13004"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}