No.
LAD-NRO/GN/2012-13/31/1778.-In exercise of the powers conferred by sub-section
(1) of Section 30 read with clause (b) of sub-section (2) of Section 11 of the
Securities and Exchange Board of India Act, 1992 (15 of 1992), the Securities
and Exchange Board of India hereby, makes the following regulations, namely, ? (1)
These regulations may be called the
Securities and Exchange Board of India (Investment Advisers) Regulations, 2013. (2)
These regulations shall come into force on
the ninetieth day from the date of their publication in the Official Gazette. (1)
In these regulations, unless the context
otherwise requires, the terms defined herein shall bear the meanings assigned
to them below, and their cognate expressions shall be construed accordingly,? (a)
?Act? means the Securities and Exchange Board
of India Act, 1992 (15 of 1992); [1][(aa)
?assets under advice? shall mean the aggregate net asset value of securities
and investment products for which the investment adviser has rendered
investment advice irrespective of whether the implementation services are provided by investment adviser or
concluded by the client directly or through other service providers;] (b)
"Board" means the Securities and
Exchange Board of India established under section 3 of the Act; (c)
?body corporate? shall have the meaning assigned
to it in or [2][under
sub-section (11) of section 2 of the Companies Act, 2013 (18 of 2013)]; (d)
?certificate? means a certificate of
registration granted under these regulations; (e)
?change in control? in relation to a company
or a body corporate, means: (i)
if its shares are listed on any recognized
stock exchange, change in control within the meaning of clause (e) of
sub-regulation (1) of regulation 2 of the Securities and Exchange Board of
India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; (ii)
in any other case, change in the controlling
interest or change in legal form. Explanation.-
For the purpose of sub-clause (ii), the expression ?controlling interest? means an interest, whether direct or indirect, to the extent
of more than fifty percent of voting rights or interest; (f)
?company? means a company incorporated under the
Companies Act, 1956 [3][or
Companies Act, 2013]; (g)
?consideration? means any form of economic
benefit including non-cash benefit, received or receivable for providing investment advice; [4][(ga)
?CPE? means continuing professional education in terms of clause (f) of sub
regulation (1) of regulation 2 of the SEBI (Certification of Associated Persons in the Securities Markets)
Regulations, 2007; (gb)
?family of client? shall include individual client, dependent spouse, dependent
children and dependent parents; (gc)
?family of an individual investment adviser? shall include individual
investment adviser, spouse, children and parents;] (h)
?financial
planning? shall include
analysis of clients?
current financial situation, identification of their
financial goals, and developing and recommending financial strategies to
realise such goals; (i)
?firm? means a partnership firm registered
under Indian Partnership Act, 1932 (9 of 1932); (j)
?form? means any of the forms set out in the
First Schedule; (k)
?inspecting authority? means any one or more
persons appointed by the Board to exercise powers conferred under regulation
23; (l)
?investment advice? means advice relating to
investing in, purchasing, selling or otherwise dealing in securities or
investment products, and advice on investment portfolio containing securities
or investment products, whether written, oral or through any other means of
communication for the benefit of the client and shall include financial planning: Provided
that investment advice given through newspaper, magazines, any electronic or
broadcasting or telecommunications medium, which is widely available to the
public shall not be considered as investment advice for the purpose of these
regulations; (m)
?investment adviser? means any person, who
for consideration, is engaged in the business of providing investment advice to
clients or other persons or group of persons and includes any person who holds
out himself as an investment adviser, by whatever name called; (n)
?limited liability partnership? means a
partnership formed and registered under The Limited Liability Partnership Act,
2008(6 of 2009); (o)
?NBFC? means a Non-Banking Financial Company regulated
by Reserve Bank of India; (p)
?NISM? means the National Institute of
Securities Market established by the Board; [5][(pa)
?non-individual? means a body corporate including a limited liability
partnership and a partnership firm;] (q)
?partner?
means partner of the firm or a limited liability
partnership who renders investment advice on behalf of the
firm or limited liability partnership; [6][(r)
?persons associated with investment advice? shall mean any member, partner,
officer, director or employee or any sales staff of such investment adviser
including any person occupying a similar status
or performing a similar function irrespective of the nature of
association with the investment adviser who is engaged in providing investment
advisory services to the clients of the investment adviser; Explanation. ? All client-facing persons such
as sales staff, service relationship managers, client relationship managers,
etc., by whatever name called shall be deemed to be persons associated with
investment advice, but do not include persons who discharge clerical or office
administrative functions where there is no client interface.] [7][(s)
?principal officer? shall mean the managing director or designated director or
managing partner or executive chairman
of the board or equivalent management body who is responsible for the overall function of
the business and operations of non-individual investment adviser.] (2)
The words and expressions used and not
defined in these regulations but defined in
the Act, the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the [8][Companies
Act, 2013 (18 of 2013)],
or any rules or regulations made thereunder shall have the same
meanings respectively assigned to them in those Acts, rules or regulations made
thereunder or any statutory modification or re-enactment thereto, as the case
may be. (1)
On and from the commencement of these regulations,
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 under these regulations: [9][***] [10][(1A)
Notwithstanding anything contained in sub-regulation (1), any application made
by a person prior to coming into force of these regulations containing such
particulars or as near thereto
as mentioned in Form A of First Schedule shall
be treated as an application made in pursuance of sub-regulation
(1) and dealt with accordingly;] (2)
An application for grant of certificate of
registration shall be made in Form A as specified in the First Schedule to
these regulations and shall be accompanied by a non- refundable application fee
to be paid in the manner specified in Second Schedule. [11][(3)
On and from the date of commencement of these regulations, no person, while
dealing in distribution of securities, shall use the nomenclature ?Independent
Financial Adviser or IFA or Wealth Adviser or any other similar name? unless
registered with the Board as Investment Adviser.?] The following persons shall not be required
to seek registration under regulation 3 subject
to the fulfillment of the conditions stipulated therefor, ? (a)
Any person who gives general comments in good
faith in regard to trends in the financial or securities market or the economic
situation where such comments do not specify any particular securities or
investment product; (b)
Any insurance agent or insurance broker who
offers investment advice solely in insurance products and is registered with
Insurance Regulatory and Development Authority for such activity; (c)
Any pension advisor who offers investment
advice solely on pension products and is registered with Pension Fund
Regulatory and Development Authority for such activity; (d)
Any distributor of mutual funds, who is a
member of a self regulatory organisation recognised by the Board or is registered
with an association of asset management companies of mutual funds,
providing any investment advice to its clients incidental to its primary activity; (e)
Any advocate, solicitor or law firm,
who provides investment advice to their clients,
incidental to their legal practise; (f)
Any member of Institute of Chartered
Accountants of India, Institute of Company Secretaries of India, Institute of
Cost and Works Accountants of India, Actuarial Society of India or any other
professional body as may be specified by the Board, who provides investment
advice to their clients, incidental to his professional service; (g)
Any stock broker or sub-broker registered
under SEBI (Stock Broker and Sub- Broker) Regulations, 1992, portfolio manager
registered under SEBI (Portfolio Managers) Regulations, 1993 or merchant
banker registered under SEBI (Merchant Bankers) Regulations, 1992, who
provides any investment advice to its clients incidental to their primary activity: Provided
that such intermediaries shall comply with the general obligation(s) and
responsibilities as specified in Chapter III of these regulations: Provided
further that existing portfolio manager offering only investment advisory
services may apply for registration under these regulations after expiry of his
current certificate of registration as a portfolio manager; (h)
Any fund manager, by whatever name called of
a mutual fund, alternative investment fund or any other intermediary or entity
registered with the Board; (i)
Any person who provides investment advice
exclusively to clients based out of India: (j)
Provided that persons providing investment
advice to Non-Resident Indian or Person of Indian Origin shall fall within the
purview of these regulations; (k)
Any [12][principal
officer, persons associated with advice] and partner of an investment adviser
which is registered under these regulations: Provided
that such [13][principal
officer, persons associated with advice] and partner shall comply with
regulation 7 of these regulations; (l)
Any other person as may be specified by the Board. (1)
The Board may require the applicant to
furnish further information or clarification regarding matters relevant to
investment advisory services for the purpose of consideration of the
application filed under sub-regulation (2) of regulation 3. (2)
The applicant or his authorised
representative, if so required, shall appear before? the Board for personal representation. For the purpose of the grant of
certificate the Board shall take into account all matters which are relevant to the grant of certificate of registration and in particular the following,
namely, ? (a)
whether
the applicant is an individual or [14][a non-individual]; [15][(b) in case the applicant is an individual, he and all persons associated with investment
advice are appropriately qualified and certified as specified in regulation 7;] [16][(c)
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 in regulation 7;] [17][(d) in case the applicant is a firm or a limited liability partnership, the principal
officer and all persons
associated with investment advice of the applicant are appropriately
qualified and certified as specified in regulation 7;] (e) whether the applicant fulfills the [18][networth]
requirements as specified in regulation 8; [19][(f)
whether the applicant, its partners, principal officer and persons associated
with investment advice, if any, are fit and proper persons based on the criteria
as specified in Schedule II of the Securities and Exchange Board of India
(Intermediaries) Regulations, 2008;] (g)
whether the applicant has the necessary
infrastructure to effectively discharge the activities of an investment adviser; (h)
whether the applicant or any person directly
or indirectly connected with the applicant has in the past been refused
certificate by the Board and if so, the grounds for such refusal; (i)
whether any disciplinary action has been taken by the Board
or any other regulatory
authority against any person directly or indirectly connected to the applicant under the respective Act, rules or
regulations made thereunder; (j)
In case a bank or an NBFC proposes to
undertake investment advisory services, whether it has been permitted by Reserve Bank of India
and the application is made through a subsidiary or separately
identifiable department or division; (k)
In case any [20][non-individual],
other than a Bank or NBFC, which proposes to undertake investment advisory
services, whether, the application is made through a separately identifiable
department or division; (l)
In case an entity incorporated outside India
undertakes to provide investment advisory services under these regulations,
whether, it has set up a subsidiary in India and whether such subsidiary has
made the application for registration; (m)
In case a foreign citizen proposes to
undertake investment advisory services, whether the applicant has set up an
office in India and proposes to undertake investment advisory services through
such office; [21][(n)Whether
the applicant is a member of a recognized body or body corporate as specified
under regulation 14: Provided
that the existing investment advisers shall comply with the requirement under
this clause in such manner as may be specified by the Board.] (1)
An individual investment adviser or a principal officer
of a non-individual investment
adviser registered as an investment adviser under these regulations, shall have
the following minimum qualification, at all times ? [23][(a)
A professional qualification or post-graduate degree or post graduate diploma
(minimum two years in duration) in finance, accountancy, business management,
commerce, economics, capital
market, banking, insurance
or actuarial science
from a university or an institution recognized by the Central Government
or any State Government or a recognised foreign university or institution or
association or a professional qualification by completing a Post Graduate
Program in the Securities
Market (Investment Advisory) from NISM of a duration not less than one year or
a professional qualification by obtaining a CFA Charter from the CFA Institute;] (b) An
experience of at least five years in activities relating to advice in financial
products or securities or fund or asset or portfolio management; (c) Persons
associated with investment advice shall meet the following minimum
qualifications, at all times - (i)
a professional qualification as provided in
clause (a) of sub-regulation (1) of regulation 7; and (ii)
an experience of at least two years in activities relating to advice in financial products or securities or fund
or asset or portfolio management: Provided
that investment advisers registered under these regulations as on the date of commencement of these regulations
shall ensure that the individual investment adviser or principal officer
of a non-individual investment adviser
registered under these
regulations and persons associated with investment advice comply with such qualification
and experience requirements within three years: Provided further
that the requirements at clauses (a) and (b) shall not apply to such
existing individual investment advisers as may be specified by the Board. (2)
An individual investment adviser or principal
officer of a non-individual investment adviser, registered under these
regulations and persons associated with investment advice shall have, at all
times a certification on financial planning or fund or asset or portfolio
management or investment advisory services - (a)
from
NISM; or (b)
from any other
organization or institution including Financial Planning
Standards Board of India
or any recognized stock exchange
in India provided
such certification is
accredited by NISM: Provided
that fresh certification must be obtained before expiry of the validity of the
existing certification to ensure continuity in compliance with certification
requirements: Provided
further that fresh certification before expiry of the validity of the existing
certification shall not be obtained through a CPE program.] (1)
Investment advisers who are non-individuals
shall have a net worth of not less than fifty lakh rupees. Explanation. ? For the purposes of this regulation, "networth" means the aggregate value of paid up share capital plus free
reserves (excluding reserves created out of
revaluation) reduced by the aggregate value of accumulated losses, deferred
expenditure not written off, including miscellaneous expenses not written
off, and networth
requirement for other services offered by the advisers in
accordance with the applicable rules and regulations. (2)
Investment advisers who are individuals shall
have net tangible assets of value not less than five lakh rupees: Provided
that existing investment advisers shall comply with the networth requirement
within three years from the date of commencement of the SEBI (Investment
Advisers) (Amendment) Regulations, 2020.] The Board on being satisfied that the applicant
complies with the requirements specified in regulation 6 shall send
intimation to the applicant and on receipt of the payment of registration [25][***]
fees as specified in Second Schedule, grant certificate of registration in Form
B under First Schedule, subject to such terms and conditions as the Board may
deem fit and appropriate. The certificate of registration granted
under regulation 9 shall be valid [26][till
it is suspended or cancelled by the Board.] [27][The
investment adviser which has already been granted certificate of registration
by the Board, prior to the commencement of the Securities and Exchange Board of
India (Change in Conditions of Registration of Certain Intermediaries)
(Amendment) Regulations, 2016 shall be deemed to have been granted a
certificate of registration, in terms of sub-regulation (1).] (1)
After considering an application made under
regulation 3, if the Board is of the opinion that a certificate should not be
granted to the applicant, it may reject the application after giving the
applicant a reasonable opportunity of being heard. (2)
The decision of the Board to reject the
application shall be communicated to the applicant within thirty days of such decision. (3)
Where an application for a certificate is
rejected by the Board, the applicant shall forthwith cease to act as an
investment adviser: Provided that nothing contained in this regulation shall affect the liability of the applicant towards its existing clients
under law. The certificate granted
under regulation 9 shall, inter alia,
be subject to the following conditions:- (a)
the investment adviser shall abide by the provisions of the Act and these regulations; (b)
the investment adviser shall forthwith inform
the Board in writing, if any information or particulars previously submitted to
the Board are found to be false or misleading in any material particular or if
there is any material change in the information already submitted; (c)
the investment adviser,
not being an individual, shall include the words ?investment adviser? in its name: Provided
that if the investment advisory service is being provided by a separately
identifiable department or division or a subsidiary, then such separately identifiable department or division
or subsidiary shall include the words ?investment adviser? in its name; (d)
individuals
registered as investment advisers shall use the term ?investment adviser? in all their correspondences with
their clients[28][;] [29][(e)
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 such time as may be specified by the Board.] (1)
The Board may recognize any body or body
corporate for the purpose of regulating investment advisers. (2)
The Board may, at the time of recognition of such body or body corporate, delegate administration and supervision of
investment advisers to such body or body corporate on such terms and conditions
as may be specified by the Board. (3)
The Board may specify that no person shall
act as an investment adviser unless he is a member of a recognized body or body
corporate and in such event, provisions of these regulations and byelaws or
articles of such body or body corporate shall apply mutatis mutandis to such investment advisers. (1)
An investment adviser shall act in a
fiduciary capacity towards its clients and shall disclose all conflicts of interests
as and when they arise. (2)
An investment adviser
shall not receive
any consideration by way of remuneration
or compensation or in any other form from any person other
than the client being advised, in respect of the underlying
products or securities for which advice is provided. (3)
An investment adviser shall maintain an
arms-length relationship between its activities as an investment adviser and
other activities. (4)
An investment adviser which is also engaged
in activities other than investment advisory services shall ensure that its investment
advisory services are clearly segregated from all its other activities, in the
manner as prescribed hereunder. (5)
An investment adviser shall ensure that in
case of any conflict of interest of the investment advisory activities with
other activities, such conflict of interest shall be disclosed to the client. (6)
An investment adviser shall not divulge any
confidential information about its client, which has come to its knowledge,
without taking prior permission of its clients, except where such disclosures
are required to be made in compliance with any law for the time being in force. (7)
An investment advisor shall not enter into
transactions on its own account which is contrary to its advice given to
clients for a period of fifteen days from the day of such advice. Provided
that during the period of such fifteen days, if the investment adviser is of
the opinion that the situation has changed, then it may enter into such a transaction on its own account after giving such revised
assessment to the client at least 24 hours in advance of entering into such transaction. (8)
An investment advisor shall follow Know Your
Client procedure as specified by the Board from time to time. (9)
An investment adviser shall abide by Code of Conduct
as specified in Third Schedule. (10)
An investment adviser shall not act on its
own account, knowingly to sell securities or investment products to or purchase
securities or investment product from a client. (11)
In case of change in control of the investment
adviser, prior approval from the Board shall be taken. (12)
Investment advisers shall furnish to the
Board information and reports as may be specified by the Board from time to time. [30][(13)
It shall be the responsibility of the investment adviser to ensure compliance
with the certification and qualification requirements as specified under
Regulation 7 at all times.] Investment Adviser shall be entitled to
charge fees for providing investment advice from a client in the manner as
specified by the Board.] Investment
adviser shall ensure that,- (a)
it obtains from the client, such information
as is necessary for the purpose of giving investment advice, including the following:- (i)
age; (ii)
investment objectives including time for
which they wish to stay invested, the purposes of the investment ; (iii)
income details; (iv)
existing
investments/ assets; (v)
risk
appetite/ tolerance; (vi)
liability/borrowing details. (b)
it has a process for assessing the risk a
client is willing and able to take, including: (i)
assessing
a client?s capacity for absorbing loss; (ii)
identifying whether client is unwilling or
unable to accept the risk of loss of capital; (iii)
appropriately interpreting client responses
to questions and not attributing inappropriate weight to certain answers. (c)
where tools are used for risk profiling, it
should be ensured that the tools are fit for the purpose and any limitations
are identified and mitigated; (d)
any questions or description in any
questionnaires used to establish the risk a client is willing and able to take
are fair, clear and not misleading, and should ensure that: (i)
questionnaire is not vague or use double
negatives or in a complex language that the client may not understand; (ii)
questionnaire
is not structured in a way that it contains leading questions. (e)
risk profile of the client is communicated to
the client after risk assessment is done; (f)
information provided by clients and their
risk assessment is updated periodically. Investment
adviser shall ensure that,- (a)
All investments on which investment advice is
provided is appropriate to the risk profile of the client; (b)
It has a documented process for selecting
investments based on client?s investment objectives and financial situation; (c)
It understands the nature and risks of
products or assets selected for clients; (d)
It has a reasonable basis for believing that
a recommendation or transaction entered into: (i)
meets
the client?s investment objectives; (ii)
is such that the client is able to bear any
related investment risks consistent with its investment objectives and risk tolerance; (iii)
is such that the client has the necessary experience
and knowledge to understand the risks involved in the transaction. (e)
Whenever a recommendation is given to a client
to purchase of a particular complex financial product, such recommendation or advice is
based upon a reasonable assessment that the structure and risk reward
profile of financial
product is consistent with clients experience, knowledge, investment objectives, risk appetite and capacity
for absorbing loss. (1)
An investment adviser shall disclose to a
prospective client, all? material? information about itself including its
business, disciplinary history, the terms and conditions on which it offers advisory
services, affiliations with other intermediaries and such other information as is necessary to take an informed
decision on whether or not to avail its services. [32][***] (4)
An investment adviser shall disclose to the
client its holding or position, if any, in the financial products or securities
which are subject matter of advice. (5)
An investment adviser shall disclose to the
client any actual or potential conflicts of interest arising from any
connection to or association with any issuer of products/ securities, including
any material information or facts that might compromise its objectivity or
independence in the carrying on of investment advisory services. (6)
An investment adviser shall, while making an
investment advice, make adequate disclosure to the client of all material facts
relating to the key features of the products or securities, particularly,
performance track record. (7)
? An investment adviser shall draw the
client?s attention to the warnings, disclaimers
in documents, advertising materials relating to an investment product which it is recommending to the client. (1) An investment adviser
shall maintain the following records,- (a)
Know
Your Client records of the client; (b)
Risk
profiling and risk assessment of the client; (c)
Suitability
assessment of the advice being provided; [33][(d)
Copies of agreements with clients, incorporating the terms and conditions as
may be specified by the Board;] (e)
Investment
advice provided, whether written or oral; (f)
Rationale
for arriving at investment advice, duly signed and dated; (g)
A register or record containing list of the
clients, the date of advice, nature of the advice, the products/securities in
which advice was rendered and fee, if any charged for such advice. (2) All records
shall be maintained either in physical
or electronic form and preserved
for a minimum period of five years: Provided
that where records are required to be duly signed and are maintained in
electronic form, such records shall be digitally signed. (3) An investment adviser
shall conduct yearly audit in respect of compliance with these regulations from
a member of Institute of Chartered Accountants of India or Institute of Company
Secretaries of India [34][and
submit a report of the same as may be specified by the Board]. An
investment adviser which is a body corporate or a partnership firm shall
appoint a compliance officer who shall be responsible for monitoring the
compliance by the investment adviser in respect of the requirements of the Act,
regulations, notifications, guidelines, instructions issued by the Board. (1)
An
investment adviser shall redress client grievances promptly. (2)
An
investment adviser shall have adequate procedure for expeditious grievance
redressal. (3)
Client
grievances pertaining to financial products in which investments have been made
based on investment advice, shall fall within the purview of the regulator of
such financial product. (4)
Any dispute
between the investment adviser and his client may be resolved
through arbitration or through Ombudsman authorized or appointed for the
purpose by any regulatory authority, as applicable. (1)
An
individual investment adviser shall not provide distribution services. (2)
The 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. (3)
A non-individual investment adviser shall have client level segregation at group level for investment advisory and
distribution services. Explanation. ? (i)
The same client cannot be offered both advisory and distribution services
within the group of the
non-individual entity. (ii)
A client can either be an advisory client
where no distributor consideration is received at the group level or
distribution services client where no advisory fee is collected from the client
at the group level. (iii)
?Group? for this purpose shall mean an entity
which is a holding, subsidiary, associate, subsidiary of a holding
company to which it is also a subsidiary or an investing company or the venturer of the
company as per the provisions of Companies Act, 2013 for non-individual
investment adviser which is a company under the said Act and in any other case,
an entity which has a controlling interest or is subject to the controlling
interest of a non-individual investment adviser.
(4)
Non-individual investment adviser shall
maintain an arm?s length relationship between its activities as investment adviser
and distributor by providing advisory services through a separately
identifiable department or division. (5)
Compliance and monitoring process for client
segregation at group or family level shall be in accordance with the guidelines
specified by the Board.] (1) Investment
adviser may provide implementation services to the advisory clients in
securities market: Provided
that investment advisers shall ensure that no consideration including any
commission or referral fees, whether embedded or indirect or otherwise, by
whatever name called is received; directly or indirectly, at investment
adviser?s group or family level for the said service, as the case maybe. (2) Investment
adviser shall provide implementation services to its advisory clients only
through direct schemes/products in the securities market. (3) Investment
adviser or group or family of investment adviser shall not charge any
implementation fees from the client. (4) The
client shall not be under any obligation to avail implementation services
offered by the investment adviser.] The Board may suo motu or upon receipt
of information or complaint appoint
one or more persons as inspecting authority to undertake inspection of
the books of accounts, records and
documents relating to investment advisers for any of the following reasons, namely: - (a)
to ensure that the books of account,
records and documents
are being maintained by the investment adviser in the manner specified in these regulations; (b)
to inspect into complaints received from
clients or any other person, on any matter having a bearing on the activities
of the investment adviser; (c)
to ascertain whether the provisions of the
Act and these regulations are being complied with by the investment adviser; (d)
to inspect into the affairs of a investment
adviser, in the interest of the securities market or in the interest of investors. (1)
Before ordering an inspection under
regulation 23, the Board shall give not less?
than ten days notice to the investment
adviser. (2)
Notwithstanding anything contained in
sub-regulation (1), where the Board is satisfied that in the interest of the
investors no such notice should be given, it may by an order in writing direct that
the inspection of the affairs of the investment adviser be taken up without
such notice. (3)
During the course of an inspection, the
investment adviser against whom the inspection is being carried out shall be
bound to discharge its obligations as provided in regulation 25. (1)
It shall be the duty of every investment
adviser in respect of whom an inspection?
has been ordered under the regulation 23 and any other associate person
who is in possession of relevant information pertaining to conduct and affairs
of such investment adviser, including [37][partners,
directors, principal officer and persons associated with investment advice], if
any, to produce to the inspecting
authority such books, accounts and other documents in his custody or control
and furnish him with such statements and information as the inspecting
authority may require for the purposes of inspection. (2)
It shall be the duty of every investment
adviser and any other associate person who
is in possession of relevant information pertaining to conduct and affairs of
the investment adviser to give to the inspecting authority all such assistance
and shall extend all such co-operation as may be required in connection with
the inspection and shall furnish such information as sought by the inspecting
authority in connection with the inspection. (3)
The inspecting authority shall, for the
purposes of inspection, have power to examine on oath and record the statement
of any employees, directors, partners [38][,
principal officer and persons associated with investment advice] or person
responsible for or connected with the activities of investment adviser or any
other associate person having relevant information pertaining to such
investment adviser. (4)
The inspecting authority shall, for the
purposes of inspection, have power to obtain
authenticated copies of documents, books, accounts of investment adviser, from
any person having control or custody of such documents, books or accounts. The inspecting authority shall, as soon as possible, on completion of the inspection submit an inspection report to the Board: Provided that if directed to do so by
the Board, the inspecting authority may submit an interim report. The Board may after consideration of the
inspection report and after giving reasonable opportunity of hearing to the
investment advisers or its authorized representatives, issue such directions as
it deems fit in the interest of securities market or the investors including,- (a)
requiring an investment adviser [39][,
partners, directors, principal officer and
persons associated with investment advice] not to provide investment
advice for a particular period; (b)
requiring the investment adviser to refund
any money collected as fees, charges or commissions or otherwise to the
concerned clients along with the requisite interest. (c)
prohibiting the investment adviser [40][,
partners, directors, principal officer and persons associated with investment
advice] from operating in the capital market or accessing the capital market
for a specified period. An investment adviser who - (a)
contravenes
any of the provisions of the Act or any regulations or circulars issued thereunder; (b)
fails to furnish any information relating to
its activity as an investment adviser as
required by the Board; (c)
furnishes to the Board information which is
false or misleading in any material particular; (d)
does
not submit periodic returns or reports as required by the Board; (e)
does not co-operate in any enquiry,
inspection or investigation conducted by the Board; (f)
fails to resolve the complaints of investors
or fails to give a satisfactory reply to the Board in this behalf, ?shall be dealt with in the manner provided
under the Securities and Exchange Board of India (Intermediaries) Regulations,
2008. (1) The
Board may, exempt any person or class of persons from the operation of all or
any of the provisions of these regulations for a period as may be specified but
not exceeding twelve months, for furthering innovation in technological aspects
relating to testing new products, processes, services, business models, etc. in
live environment of regulatory sandbox in the securities markets. (2) Any
exemption granted by the Board under sub-regulation (1) shall be subject to the
applicant satisfying such conditions as may be specified by the Board including
conditions to be complied with on a continuous basis. Explanation.
? For the purposes of these regulations, "regulatory sandbox" means a
live testing environment where new products, processes, services, business
models, etc. may be deployed on a limited set of eligible customers for a
specified period of time, for furthering innovation in the securities market,
subject to such conditions as may be specified by the Board.] In order to remove any difficulties in the application or interpretation of these regulations, the Board may issue clarifications
and guidelines in the form of circulars. The Board reserves the right to alter,
modify and overrule any decision, action taken or penalties imposed by the body
or body corporate recognized under regulation
14. FORM A Securities and Exchange Board of India
(Investment Advisers) Regulations, 2013 [42][See
Regulation 3] [43][Application for
Grant of Certificate of Registration] Securities
and Exchange Board of India SEBI
Bhavan, C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai 400051 -
India INSTRUCTIONS 1. This
form is meant for use by the applicant for grant of certificate of registration
as an investment adviser. 2. The
applicant should complete this form, and submit it, along with all supporting
documents to the Board at its head office at
Mumbai. 3. This application form
should be filled in accordance with these regulations. 4. The application shall
be considered by the Board provided it is complete in all respects. 5. All
answers must be legible and all the pages must be numbered with signature/
stamp on each page of the form. 6. Information
which needs to be supplied in more detail may be given on separate sheets which
should be attached to the application form and appropriately numbered. 7. The application must
be signed. 8. The
application must be accompanied by an application fee as specified in the
Second Schedule to these regulations. 1. GENERAL INFORMATION (a) ? Name,
address of the registered office, address for correspondence and principal
place of business, telephone number(s), fax number(s), e-mail address of the
applicant. [44][(b)***]. (c) ? Name,
direct line number, mobile number and e-mail of the contact person(s) [45][and
principal officer]. (d) ? Legal
structure of applicant - Whether the applicant is an individual [46][
or non- individual]. (e) ? Whether
the applicant is a bank /NBFC. (f) ?? Date
and place of incorporation/ establishment, if any. If the applicant is
incorporated outside India, details of such incorporation. (g) ? Whether
the applicant is engaged in investment advisory services prior to making
application under these regulations. (h) ? Whether
the applicant is registered with SEBI, RBI, IRDA or PFRDA in any capacity. If
so, details of such registration. (i) ?? Write-up
on the activities of the applicant. [47][***] 2. DETAILS OF APPLICANT (Provide details of
only the section applicable to you) I.
In case applicant is
an individual: [48][1.
Whether the applicant and persons associated with investment advice comply with
qualification and certification requirements under regulation 7 and applicant
has submitted a declaration with respect to the same. (Provide
self-certified copies of supporting documents).] 2.
Copy of certification obtained in accordance with
regulation 7(2). [49][***] [50][3.
Number of persons associated with investment advice, if any, who shall render
investment advice under these regulations on behalf of the applicant. Provide
documents as mentioned in points 1 to 2 above for such persons associated with
investment advice.] 4.
Enclose identity proof and address proof of
the applicant [51][and
persons associated with investment advice]. 5.
Details of ownership/directorship of the
applicant in any companies or partnership interest in any firm or limited
liability partnership. 6.
Copy
of Income Tax Return/ Copy of Form 16 for the last 3 years. 7.
Copy of assets
and liabilities statement
and certification of net tangible
assets certified by a chartered accountant (not more than six months old
at the time of filing of
application). Please note that membership number of the Chartered accountant
must be included in the certificate, II.
In case applicant is
a company: 1.
Shareholding pattern and profile of the
directors (Enclose identity proof and address proof of the directors). 2.
Number of [52][persons
associated with investment advice] who render/ propose to render investment
advice under these regulations on behalf of
the applicant. [53][3.
Declaration by the applicant that its principal officer and persons associated
with investment advice currently comply with the certification, qualification
and experience requirements under regulation 7.] 4.
Declaration by the applicant that it shall
ensure that its [54][principal
officer and persons associated with investment advice]
comply with the certification
and qualification requirements under Regulation 7 at all times. 5.
List of associated companies registered with
SEBI, RBI, IRDA or PFRDA along with the registration number. 6.
If applicant is a bank or NBFC, then copy of
approval from RBI for undertaking investment advisory services. 7.
Net worth certificate by a chartered
accountant, not more than six months old. Please note that membership number of
the chartered accountant must be included in the certificate. [55][8.
Enclose identity proof and address proof of the applicant, principal officer
and persons associated with investment advice.] III. In case applicant is a partnership firm or a limited
liability partnership: 1.
Names and Beneficial ownership pattern of the
partners [56][,
principal officer and persons associated with investment advice]
engaged/proposed to engage in investment advice (Enclose identity
proof and address
proof of the partners
[57][,
principal officer and persons associated with investment advice]). [58][2.
Whether the aforesaid principal officer and persons associated with investment
advice comply with certification and qualification requirements under
regulation 7 and applicant has submitted a declaration with respect to the
same. (Provide self-certified copies of supporting documents).] [59][3. Copy of certification obtained by the aforesaid principal
officer and persons associated with investment advice
in accordance with regulation 7(2).] 4.
Declaration
that the aforesaid [60][principal officer
and persons associated with investment advice] shall obtain fresh certification before
expiry of the validity of the existing certification to ensure continuity in
compliance with certification requirements. 5.
Copy of assets and liabilities statement and
certification of [61][networth]
of the partnership firm certified by a chartered accountant (not more than six
months old at the time of filing of application). Please note that membership number of the chartered
accountant must be included in the certificate. IV. In case applicant is a body corporate (other than company
or limited liability partnership): 1.
Shareholding pattern and profile of the
directors [62][,
principal officer and persons associated with investment advice] (Enclose
identity proof and address proof of the directors [63][,
principal officer and persons associated with investment advice]). 2.
Whether the applicant is set up or
established under the laws of the Central or State Legislature and whether the
applicant is permitted to carry on of the
activity of an investment adviser (Enclose relevant extract of the relevant
Statute/Act). 3.
Number of [64][principal
officer and persons associated with investment advice] who render/ propose to
render investment advice under these regulations
on behalf of the applicant. 4.
[65][Declaration
by the applicant that its principal officer and persons associated with investment advice
currently comply with the certification and qualification
requirements under regulation 7.] 5.
Declaration by the applicant that it shall
ensure that its [66][principal
officer and persons associated with investment advice]
comply with the certification
and qualification requirements under regulation 7 at all times. 6.
Net worth certificate by a chartered
accountant, not more than six months old. Please note that membership number of
the chartered accountant must be included in the certificate. 3. BUSINESS PLAN 1.
Proposed
business plan & means of achieving the same. 2.
The type of products/ securities on which
investment advice is proposed to be rendered. 3.
Process
for risk profiling of the client and for assessing suitability of advice. 4. DETAILS OF INFRASTRUCTURE 1. Details
of office space, office equipment, furniture and fixtures, communication
facilities, research capacity, research software for undertaking investment
advisory services. 2. Declaration
that the applicant has the necessary infrastructure to effectively discharge
the activities of an investment adviser. [67][5. IMPLEMENTATION OF
ADVICE OR EXECUTION SERVICES. 1. Provide
a declaration that no consideration including any commission or referral fees
whether embedded or indirect or otherwise by whatever name called shall be
received directly or indirectly at Investment Adviser?s group or family level
for the said service, as the case maybe. 2. If
the applicant is a non-individual, whether the applicant proposes to offer
distribution services.] 6. OTHER INFORMATION/DECLARATIONS/ REGULATORY
ACTIONS (a) Details of all
settled and pending disputes in the last 5 years. (b) Whether
any previous application for grant of certificate made by any person directly
or indirectly connected with the applicant has been rejected by the Board; If
yes, provide details of the same. (c) Whether
any disciplinary action has been taken by the Board or any other regulatory authority against any person directly or
indirectly connected with the applicant under the Act or the regulations made
there under in the last 5 years. If yes, provide details of the action. (d) Whether
the applicant/directors/promoters/ partners [68][,
principal officer and persons associated with investment advice] have been
indicted/involved in any economic offence in the last 5 years. If yes, provide
details of the same. (e)
A credit report/ score from CIBIL for
the applicant.(For applicants other than
financial institutions & banking companies) (f) Declaration
that the applicant, its [69][directors,
principal officer, persons associated
with investment advice] and partners, if any, are fit and proper persons
based on the criteria
as specified in Schedule II of the Securities and Exchange Board of India
(Intermediaries) Regulations, 2008; (g) Declaration
that the applicant shall not obtain any consideration by way of remuneration or
compensation or any other form whatsoever, from any person other than the
client being advised, in respect of the underlying products or securities for
which advice is provided to the client. (h) Any
other information considered relevant to the nature of services to be rendered
by the applicant. 7.?? DECLARATION
STATEMENT I/We
hereby agree and declare that the information supplied in the application,
including the attachment sheets, is complete and true. AND I/ we further
agree that, I/we shall notify the Securities and Exchange Board of India immediately any change in the
information provided in the application. I/
We further agree that I/ we shall comply with, and be bound by the Securities
and Exchange Board of India Act, 1992, and the Securities and Exchange Board of
India (Investment Advisers) Regulations, 2013, guidelines/instructions as may
be announced by the Securities and Exchange Board of India from time to time. I/
We further agree that as a condition of registration, I/ we shall abide by such
operational instructions/directives as may be issued by the Securities and
Exchange Board of India from time to time. For and on behalf of ----------------------- (Name of the applicant) Authorized signatory/ Applicant (Signature) (Date and Place) FORM B Securities and Exchange Board of India
(Investment Adviser) Regulations, 2013 [See regulation 9] Certificate
of registration as investment adviser I. In
exercise of the powers conferred by sub-section (1) of section 12 of the
Securities and Exchange Board of India Act, 1992 (15 of 1992), read with the
regulations made there under, the Board hereby grants a certificate of
registration to as
an investment adviser subject to the conditions specified in the Act and in the
regulations made thereunder. II. The
Registration Number of the investment adviser
is IN/IA/ ??? . Date : Place : MUMBAI By
Order Sd/-
For
and on behalf of Securities and Exchange Board of India Securities and
Exchange Board of India (Investment Advisers) Regulations, 2013 [Regulation 9] FEES 1.
Every applicant shall pay non-refundable application fees along
with the application for grant [71][***]
of certificate of registration as under: a.? ?[72][For?? individuals??????????? and firms ? 2,000] b.? ?[73][For?? Body?????????? Corporate including???????????? Limited Liability Partnerships] ? 10,000 2.
[74][Every applicant shall pay registration fee at the
time of grant of certificate by the Board as under: a.
For individuals and firms?? ? 3,000 b.
For body Corporate including Limited Liability Partnerships?? ? 15,000] 3.
[75][An investment adviser who has been granted a
certificate of registration, to keep its registration in force, shall pay fee [76][specified
below] every five years, from the date of grant of certificate of registration
or from the date of grant of certificate of registration granted prior to the
commencement of the Securities and Exchange Board of India (Change in
Conditions of Registration of Certain Intermediaries) (Amendment) Regulations,
2016, as the case may be, within three months before expiry of the period for
which fee has been paid[77][:]] [78][a. For individuals and firms ? 1,000 b. For Body Corporate including Limited Liability Partnerships ? 5,000] 4.
[79][The fee referred
to in paragraph 2 shall be paid by the applicant within
fifteen days from the date of
receipt of intimation from the Board by way of demand draft in favour of
Securities and Exchange Board of India' payable at Mumbai or at respective
regional or local office. or by way of direct credit in the bank account
through NEFT/RTGS/IMPS or any other mode allowed by RBI.] Securities and
Exchange Board of India (Investment Advisers) Regulations, 2013 [See sub-regulation
(9) of regulation 15] CODE OF CONDUCT
FOR INVESTMENT ADVISER 1.
Honesty and fairness An investment adviser shall act honestly, fairly
and in the best interests of its clients and in the integrity of the market. 2.
Diligence An investment adviser shall act with due skill,
care and diligence in the best interests of its clients
and shall ensure
that its advice
is offered after thorough analysis
and taking into account
available alternatives. 3.
Capabilities An investment adviser shall have and employ
effectively appropriate resources and procedures which are needed for the
efficient performance of its business activities. 4.
Information about clients An investment adviser shall seek from its clients,
information about their financial situation, investment experience and
investment objectives relevant to the services to be provided and maintain
confidentiality of such information. 5.
Information to its clients An investment adviser
shall make adequate
disclosures of relevant
material information while
dealing with its clients. 6.
Fair and reasonable charges An investment adviser advising a client may charge
fees, subject to any ceiling as may be specified by the Board [80][***]. The investment adviser
shall ensure that fees charged to the clients is fair and reasonable. 7.
Conflicts of interest An investment adviser
shall try to avoid conflicts of interest as far as possible and when
they cannot be avoided, it shall ensure that appropriate disclosures are made
to the clients and that the clients are fairly
treated. 8.
Compliance An investment adviser
including its [81][partners, principal officer and persons
associated with investment advice]
shall comply with all regulatory requirements applicable to the
conduct of its business activities so as to promote the best interests of
clients and the integrity of the market. 9.
Responsibility of senior management The senior management of a body corporate which is
registered as investment adviser shall bear primary
responsibility for ensuring
the maintenance of appropriate standards of conduct and adherence to
proper procedures by the body corporate. [1] Inserted
by the SEBI (Investment Advisers) (Amendment) Regulations, 2020, w.e.f.
30-09-2020. [2]
Substituted for the words, symbols and numbers ?under sub-section (7) of
section 2 of the Companies Act, 1956 (1 of 1956)? by the SEBI (Investment
Advisers) (Amendment) Regulations, 2020, w.e.f. 30-09-2020. [3] Inserted
by the SEBI (Investment Advisers) (Amendment) Regulations, 2020, w.e.f.
30-09-2020. [4] ibid. [5] Inserted
by the SEBI (Investment Advisers) (Amendment) Regulations, 2020, w.e.f. 30-09-2020. [6]
Substituted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. Prior to its substitution, clause (r) read as under; ?(r)
?representative? means an employee or an agent of an investment adviser who
renders investment advice on behalf of that investment adviser.? [7] Inserted
by the SEBI (Investment Advisers) (Amendment) Regulations, 2020, w.e.f.
30-09-2020. [8]
Substituted for the words, symbols and numbers ?Companies Act, 1956 (1 of
1956)? by the SEBI (Investment Advisers) (Amendment) Regulations, 2020, w.e.f.
30-09-2020. [9] Omitted
by the SEBI (Investment Advisers) (Amendment) Regulations, 2020, w.e.f.
30-09-2020. Prior to its omission, regulation 3(1) proviso read as under;
?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 under sub-regulation (2) within the said period of six months, till
the disposal of such application.? [10]
Inserted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. [11]
Inserted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. [12]
Substituted for the word ?representative? by the SEBI (Investment Advisers)
(Amendment) Regulations, 2020, w.e.f. 30-09-2020. [13] ibid [14]
Substituted for the words ?a body corporate or a firm? by the SEBI (Investment
Advisers) (Amendment) Regulations, 2020, w.e.f. 30-09-2020. [15] Substituted
by the SEBI (Investment Advisers) (Amendment) Regulations, 2020, w.e.f.
30-09-2020. Prior to its substitution, clause (b) read as under; ?whether in
case the applicant is an individual, he is appropriately qualified and
certified as specified in regulation 7;?. [16]
Substituted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. Prior to its substitution, clause (c) read as under;
?whether in case the applicant is a body corporate, all the representatives of
the applicant who provide investment advice are appropriately qualified and
certified as specified in regulation 7;? [17]
Substituted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. Prior to its substitution, clause (d) read as under;
?whether in case the applicant is a firm or a limited liability partnership,
all partners who are engaged in giving investment advice are qualified and
certified as specified in regulation 7;? [18]
Substituted for the words ?capital adequacy? by the SEBI (Investment Advisers)
(Amendment) Regulations, 2020, w.e.f. 30-09-2020. [19]
Substituted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. Prior to its substitution, clause (f) read as under;
?whether the applicant, its representatives and partners, if any, are fit and
proper persons based on the criteria as specified in Schedule II of the
Securities and Exchange Board of India (Intermediaries) Regulations, 2008;? [20]
Substituted for the words ?body corporate? by the SEBI (Investment Advisers)
(Amendment) Regulations, 2020, w.e.f. 30-09-2020. [21]
Inserted by the SEBI (Investment Advisers) (Amendment) Regulations, 2021,
w.e.f. 01-04-2021. [22]
Substituted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. Prior to its substitution, regulation 7 read as under;
?Qualification and certification requirement. 7(1) An individual registered as
an investment adviser under these regulations and partners and representatives
of an investment adviser registered under these regulations offering investment
advice shall have the following minimum qualifications, at all times: (a) A
professional qualification or post-graduate degree or post graduate diploma in
finance, accountancy, business management, commerce, economics, capital market,
banking, insurance or actuarial science from a university or an institution
recognized by the central government or any state government or a recognised
foreign university or institution or association; or (b) A graduate in any discipline
with an experience of at least five years in activities relating to advice in
financial products or securities or fund or asset or portfolio management. (2)
An individual registered as an investment adviser and partners and
representatives of investment advisers registered under these regulations
offering investment advice shall have, at all times, a certification on
financial planning or fund or asset or portfolio management or investment
advisory services: (a) from NISM; or (b) from any other organization or
institution including Financial Planning Standards Board India or any
recognized stock exchange in India provided that such certification is
accredited by NISM.: Provided that the existing investment advisers seeking
registration under these regulations shall ensure that their partners and
representatives obtain such certification within two years from the date of
commencement of these regulations: Provided further that fresh certification
must be obtained before expiry of the validity of the existing certification to
ensure continuity in compliance with certification requirements.? [23]
Substituted by the Securities and Exchange Board of India (Investment Advisers)
(Second Amendment) Regulations, 2021 w.e.f . 16.03.2021. Prior to its
substitution, clause (a) read as under; ?(a) A professional qualification or
post-graduate degree or post graduate diploma (minimum two years in duration)
in finance, accountancy, business management, commerce, economics, capital
market, banking, insurance or actuarial science from a university or an
institution recognized by the Central Government or any State Government or a
recognised foreign university or institution or association or a CFA Charter
from the CFA Institute;? [24]
Substituted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. Prior to its substitution, regulation 8 read as under;
?Capital adequacy. (1) Investment advisers which are body corporate shall have
a net worth of not less than twenty five lakh rupees. Explanation.- For the
purposes of this regulation, "networth" means the aggregate value of
paid up share capital plus free reserves (excluding reserves created out of
revaluation) reduced by the aggregate value of accumulated losses, deferred
expenditure not written off, including miscellaneous expenses not written off,
and capital adequacy requirement for other services offered by the advisers in
accordance with the applicable rules and regulations. (2) Investment advisers
who are individuals or partnership firms shall have net tangible assets of
value not less than rupees one lakh: Provided that existing investment advisers
shall comply with the capital adequacy requirement within one year from the
date of commencement of these regulations.? [25] The
words ?/renewal? was omitted by the Securities and Exchange Board of India
(Change in Conditions of Registration of Certain Intermediaries) (Amendment)
Regulations, 2016 w.e.f. 08-12-2016. [26]
Substituted for the words ?for a period of five years from the date of its
issue.? by the Securities and Exchange Board of India (Change in Conditions of
Registration of Certain Intermediaries) (Amendment) Regulations, 2016 w.e.f.
08-12-2016. [27]
Substituted by the Securities and Exchange Board of India (Change in Conditions
of Registration of Certain Intermediaries) (Amendment) Regulations, 2016 w.e.f.
08-12-2016. Prior to substitution regulation 11 read as under: ?11. (1) Three
months before the expiry of the period of validity of the certificate, the
investment adviser may, if he so desires, make an application in Form A for
grant of renewal of certificate of registration. (2)The application for renewal
under sub-regulation (1) shall be dealt with in the same manner as if it were
an application made under sub-regulation (2) of regulation 3 for grant of
certificate.? [28]
Substituted for the symbol ?.? by the SEBI (Investment Advisers) (Amendment)
Regulations, 2020, w.e.f. 30- 09-2020. [29]
Inserted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. [30]
Substituted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. Prior to its substitution, sub-regulation (13) read as
under; ?(13) It shall be the responsibility of the Investment Adviser to ensure
that its representatives and partners, as applicable, comply with the
certification and qualification requirements under Regulation 7 at all times.? [31]
Inserted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. [32] Omitted
by the SEBI (Investment Advisers) (Amendment) Regulations, 2020, w.e.f.
30-09-2020. Prior to its omission, sub-regulation (2) and (3) read as under;
?(2) An investment adviser shall disclose to its client, any consideration by
way of remuneration or compensation or in any other form whatsoever, received
or receivable by it or any of its associates or subsidiaries for any
distribution or execution services in respect of the products or securities for
which the investment advice is provided to the client. (3) An investment
adviser shall, before recommending the services of a stock broker or other
intermediary to a client, disclose any consideration by way of remuneration or
compensation or in any other form whatsoever, if any, received or receivable by
the investment adviser, if the client desires to avail the services of such
intermediary.? [33]
Substituted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. Prior to its substitution, clause (d) read as under;
?(d)Copies of agreements with clients, if any;? [34]
Inserted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. [35]
Substituted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. Prior to its substitution, regulation 22 read as under;
?Segregation of execution services. 22 Investment advisers which are banks,
NBFCs and body corporate providing distribution or execution services to their
clients shall keep their investment advisory services segregated from such
activities: Provided that such distribution or execution services can only be
offered subject to the following: (a) The client shall not be under any
obligation to avail the distribution or execution services offered by the
investment adviser. (b) The investment adviser shall maintain arms length
relationship between its activities as investment adviser and distribution or
execution services. (c) All fees and charges paid to distribution or execution
service providers by the client shall be paid directly to the service providers
and not through the investment adviser.? [36]
Inserted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. [37]
Substituted for the words ?representative of investment adviser? by the SEBI
(Investment Advisers) (Amendment) Regulations, 2020, w.e.f. 30-09-2020. [38]
Inserted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. [39]
Inserted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. [40] ibid. [41]
Inserted by the SEBI (Regulatory Sandbox) (Amendment) Regulations, 2020, w.e.f.
17-04-2020. [42]
Substituted for the words ?See Regulations 3 and 11? by the Securities and
Exchange Board of India (Change In Conditions Of Registration Of Certain
Intermediaries) (Amendment) Regulations, 2016 w.e.f. 08-12-2016. [43] Substituted
for the words ?Application for Grant of Certificate of Registration/Renewal as
investment adviser? by the Securities and Exchange Board of India (Change In
Conditions Of Registration Of Certain Intermediaries) (Amendment) Regulations,
2016 w.e.f. 08-12-2016. [44] Omitted
by the by the Securities and Exchange Board of India (Change in Conditions of
Registration of Certain Intermediaries) (Amendment) Regulations, 2016 w.e.f.
08-12-2016. Prior to omission sub-para(b) read as under: ?(b) Whether application
is for registration/ renewal. Provide registration number if the application is
for renewal of certificate.? [45]
Inserted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. [46]
Substituted for the words and symbol ?, body corporate (including company),
partnership firm or limited liability partnership? by the SEBI (Investment
Advisers) (Amendment) Regulations, 2020, w.e.f. 30-09-2020. [47] Omitted
by the SEBI (Investment Advisers) (Amendment) Regulations, 2020, w.e.f. 30-09-2020.
Prior to its omission, the following words of clause (i) read as under; (For
renewal application, provide details of existing investment advisory services
including number and type of clients, assets under advice, revenue,
profitability, products/ securities on which investment advice was provided,
etc.) [48]
Substituted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. Prior to its substitution, clause 1. read as under; ?Whether
the applicant has: a. A professional qualification or post-graduate degree or
post graduate diploma in finance, accountancy, business management, commerce,
economics, capital market, banking, insurance or actuarial science from a
university or an institution recognized by the Central Government or any State
Government or a recognised foreign university or institution or association; or
b. A graduate in any discipline with an experience of at least five years in
activities relating to advice in financial products or securities or fund or
asset or portfolio management. (Provide self certified copies of supporting
documents).? [49] Omitted
by the SEBI (Investment Advisers) (Amendment) Regulations, 2020, w.e.f.
30-09-2020. Prior to its omission, the following words of clause (2) read as
under; (If the applicant is an existing investment adviser applying for fresh
registration, then provide a declaration stating that it shall obtain such
certification within two years from the date of commencement of these
regulations and submit a copy of the certification to the Board within 15 days
of receipt of such certification.) [50]
Substituted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. Prior to its substitution, clause 3 read as under; ?3.
Number of employees and agents of the applicant, if any, who shall render
investment advice under these regulations on behalf of the applicant. Provide
documents as mentioned in points (1) to (2) above for such employees/ agents.? [51]
Inserted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020 [52]
Substituted for the words ?employees and agents of the applicant (hereinafter
referred to as ?representatives?)? by the SEBI (Investment Advisers)
(Amendment) Regulations, 2020, w.e.f. 30-09-2020. [53]
Substituted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. Prior to its substitution, clause 3 read as under; ?3.
Declaration by the applicant that its representatives currently comply with the
certification and qualification requirements under regulation 7. (If the
applicant is an existing investment adviser applying for fresh registration,
then provide a declaration stating that the applicant shall ensure that all its
representatives obtain such certification within two years from the date of
commencement of these regulations and after all its representatives obtain the
certification, a declaration to that effect shall be submitted to SEBI.) [54]
Substituted for the word ?representatives? by the SEBI (Investment Advisers)
(Amendment) Regulations, 2020, w.e.f. 30-09-2020. [55]
Inserted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. [56]
Inserted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. [57]
Inserted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. [58]
Substituted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. Prior to its substitution, clause 2. read as under;
?2.Whether the aforesaid partners have: a. A professional qualification or
post-graduate degree or post graduate diploma in finance, accountancy, business
management, commerce, economics, capital market, banking, insurance or
actuarial science from a university or an institution recognized by the Central
Government or any State Government or a recognised foreign university or
institution or association; or b. A graduate in any discipline with an
experience of at least five years in activities relating to advice in financial
products or securities or fund or asset or portfolio management. (Provide self
certified copies of supporting documents). [59]
Substituted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. Prior to its substitution, clause 3. read as under; ?3.Copy
of certification obtained by the aforesaid partners in accordance with
regulation 7(2). (If the applicant is an existing investment adviser applying
for fresh registration, then provide a declaration stating that all the
partners engaged in investment advice shall obtain such certification within
two years from the date of commencement of these regulations and after all such
partners obtain the certification, a declaration to that effect shall be
submitted to SEBI.)? [60]
Substituted for the word ?partner? by the SEBI (Investment Advisers)
(Amendment) Regulations, 2020, w.e.f. 30-09-2020. [61]
Substituted for the word ?net tangible assets? by the SEBI (Investment
Advisers) (Amendment) Regulations, 2020, w.e.f. 30-09-2020. [62]
Inserted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. [63] ibid. [64]
Substituted for the words ?employees and agents of the applicant (hereinafter
referred to as ?representatives?)? by the SEBI (Investment Advisers)
(Amendment) Regulations, 2020, w.e.f. 30-09-2020 [65]
Substituted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. Prior to its substitution, clause 4 read as under; ?4.
Declaration by the applicant that its representatives currently comply with the
certification and qualification requirements under regulation 7. (If the
applicant is an existing investment adviser applying for fresh registration,
then provide a declaration stating that the applicant shall ensure that all its
representatives obtain such certification within two years from the date of
commencement of these regulations and after all its representatives obtain the
certification, a declaration to that effect shall be submitted to SEBI.) [66]
Substituted for the words ?representatives? by the SEBI (Investment Advisers)
(Amendment) Regulations, 2020, w.e.f. 30-09-2020 [67]
Substituted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. Prior to its substitution, item 5 read as under; ?EXECUTION
SERVICES 1. If the applicant is a body corporate, whether the applicant
proposes to offer distribution or execution services to its clients. 2. If yes,
provide a declaration that the services are being offered through a subsidiary/
separately identifiable department or division.? [68]
Inserted by the SEBI (Investment Advisers) (Amendment) Regulations, 2020,
w.e.f. 30-09-2020. [69]
Substituted for the word ?representatives? by the SEBI (Investment Advisers)
(Amendment) Regulations, 2020, w.e.f. 30-09-2020. [70]
Substituted by the SEBI (Payment of Fees) (Amendment) Regulations, 2014, w.e.f
23.05.2014. Prior to its substitution, the Second Schedule read as under: 1.
?Every applicant shall pay non-refundable application fees of five thousand
rupees along with the application for grant or renewal of certificate of
registration. 2. Applicants which are individuals and firms shall pay a sum of
ten thousand rupees as registration/ renewal fee at the time of grant or
renewal of certificate by the Board. 3. A body corporate shall pay a sum of one
lakh rupees as registration/ renewal fee at the time of grant or renewal of
certificate by the Board. 4. The fee referred to in paragraph 1, 2 and 3 shall
be paid by the applicant within fifteen days from the date of receipt of
intimation from the Board by a demand draft in favor of 'Securities and
Exchange Board of India' payable at Mumbai or at respective regional or local
office.? [71] The
words ?or renewal? omitted by the Securities and Exchange Board of India
(Change In Conditions Of Registration Of Certain Intermediaries) (Amendment)
Regulations, 2016 w.e.f. 08-12-2016. [72]
Substituted by the SEBI (Investment Advisers) (Amendment) Regulations, 2021,
w.e.f. 01-04-2021. Prior to its substitution, sub-clause (a) read as under:
?For individuals and firms ? 5,000? [73]
Substituted by the SEBI (Investment Advisers) (Amendment) Regulations, 2021,
w.e.f. 01-04-2021. Prior to its substitution, sub-clause (b) read as under:
?For Body Corporate including Limited Liability Partnerships ? 25,000? [74]
Substituted by the SEBI (Investment Advisers) (Amendment) Regulations, 2021,
w.e.f. 01-04-2021. Prior to its substitution, clause (2) read as under: ?Every
applicant shall pay registration fee at the time of grant or renewal of
certificate by the Board as under: a. For individuals and firms ? 10,000 b. For
Body Corporate including Limited Liability Partnerships ? 5,00,000 [75]
Inserted by the by the Securities and Exchange Board of India (Change In
Conditions Of Registration Of Certain Intermediaries) (Amendment) Regulations,
2016 w.e.f. 08-12-2016. [76]
Substituted for the words ?prescribed at paragraph 2 above? by the SEBI
(Investment Advisers) (Amendment) Regulations, 2021, w.e.f. 01-04-2021. [77]
Substituted for the symbol ?.? by the SEBI (Investment Advisers) (Amendment)
Regulations, 2021, w.e.f. 01- 04-2021. [78]
Inserted by the SEBI (Investment Advisers) (Amendment) Regulations, 2021,
w.e.f. 01-04-2021. [79] by the
Securities and Exchange Board of India (Change In Conditions Of Registration Of
Certain Intermediaries) (Amendment) Regulations, 2016 w.e.f. 08-12-2016. [80] The
words ?if any? was omitted by the SEBI (Investment Advisers) (Amendment)
Regulations, 2020, w.e.f. 30-09-2020 [81]
Substituted for the words ?representative(s)? by the SEBI (Investment Advisers)
(Amendment) Regulations, 2020, w.e.f. 30-09-2020.SECURITIES AND EXCHANGE BOARD OF INDIA (INVESTMENT ADVISERS)
REGULATIONS, 2013