Sebi notifies amendments to investment adviser norms

Mumbai: The Securities and Exchange Board of India on Friday notified the investment advisers regulations making it effective from September 30,2020.

In February, the Sebi board had cleared norms for investment advisers, proposing separation of advisory and distribution activities at the client level to address conflict of interest issue.

Until now, investment advisers would provide advisory as well as distribute financial products to the same client.


“Investment Advisers are allowed to provide implementation services (Execution) through direct schemes or products in the securities market. However, no consideration can be received directly or indirectly, at investment adviser’s group or family level for these services,” Sebi said in a statement on Friday.

The fee charged by the investment adviser for providing investment advice from a client
would be specified by Sebi.

“The guidelines dealing with various other issues like key terms and conditions of Investment Advisory Services agreement, modes of charging fee, periodicity etc. will be separately specified through a Circular,” the regulator said.

Sebi has also enhanced the eligibility criteria for registration as an Investment Adviser including net worth of Rs 50 lakhs for non-individuals and Rs 5 lakhs for individuals.

The regulator said individuals registered as investment advisers whose number of clients exceed 150 , should apply for registration with it as non-individual investment adviser.