The applicant is required to submit the form with a fee of Rs, 5,000 by way of bank demand draft
With an aim to weed out unauthorised entities giving advice to investors, market regulator Securities and Exchange Board of India (SEBI) recently said anyone seeking to act as an investment adviser would need to first obtain a certificate of registration for the same.
As a part of its efforts to make it convenient for genuine entities to get the registration, SEBI has allowed filing applications with its regional & local offices across India.
"In terms of the Investment Adviser Regulations, no person shall act as an investment adviser unless he has obtained a certificate of registration from the Board or he is specifically exempt," SEBI said in a statement.
The regulator SEBI said the applicant seeking to act as an investment adviser should make an application to SEBI in a prescribed format along with the necessary supporting documents such as details of the investment advice provided.
The applicant is required to submit the form with a fee of Rs. 5,000 by way of bank demand draft (DD).
Generally on receipt of application, the applicant would receive a reply from SEBI within one month.
SEBI has notified Investment Adviser Regulations in January this year (2013).
As per the regulation, SEBI made it mandatory for investment advisers to register with the capital market regulator SEBI and also require them to disclose all issues that could result in conflict of interests, among others.
To ensure more transparency, the new regulations require investment advisers banks, non-banking financial companies (NBFCs) & corporates would have to segregate their investment advisory services from other activities.
Investment advisers also have to disclose the fee received for their advice on a particular financial product.
SEBI said all entities engaged in advising on financial products would need to get registered with it. Besides, the investment advisers need to separate this activity from all other activities such as distribution.
To be an investment adviser, corporate bodies need to have a minimum worth of Rs. 25 lakh while the threshold level would be Rs. 1 lakh for individuals.
A time period of 1 year has been given for existing investment advisers to comply with necessary capital adequacy requirements.
In a move to curb the risks related to advisory services, the regulator SEBI said the investment adviser cannot enter into transactions on its own account contrary to the advice given to clients for at least 15 days from the day of such advice.
Advisers must disclose the fee they get for advice on a particular product, their holdings in products on which they are advising, the risks involved and any conflict of interest arising out of their association with issuers of the financial products, according to SEBI notification.
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