Sebi sets up working group to review MF distributor rules, align framework with investment advisers: Tuhin Kanta Pandey

Securities and Exchange Board of India (Sebi) Chairman Tuhin Kanta Pandey said on Monday that the regulator has set up a working group to review the existing regulatory framework governing mutual fund distributors (MFDs) and examine areas of overlap with investment advisers (IAs).

The move is aimed at harmonising regulations between the two segments and addressing any operational or regulatory overlaps between distributors and registered investment advisers, Pandey said in an address organised by the Association of Registered Investment Advisors (ARIA).

The review comes at a time when India’s investment advisory ecosystem is undergoing a transition. According to SEBI, the number of registered investment advisers currently stands at around 1,000, including 470 individuals and 530 non-individual entities.


Pandey noted that while the number of registered advisers has declined in recent years, there has been a shift towards more institutional structures, which is an important development as India’s capital markets continue to expand.

The Sebi chief expressed concern over the decline in the number of registered investment advisers since 2021. He said the markets need more IAs as India’s investor base is expanding rapidly. He said that their numerical inadequacy could lead to mushrooming of unregulated voices like the finfluencers, who present opinion as expertise and speculation as strategy.

Sebi’s investor survey shows that nearly 62% of prospective investors are influenced by finfluencers, he highlighted, calling it "undesirable". It distorts investor behavior, weakens discipline, and erodes trust, the Chairman added.

He was speaking on 'The Regulator’s Perspective - The Evolving Agenda for Investment Advisers' at ARIA Aspire 2026.

As part of its broader efforts to strengthen the advisory ecosystem, Sebi is also working on a common advertisement code for all intermediaries, a digital platform called SEBI SETU to provide end-to-end regulatory guidance for investment advisers, and a light-touch penalty framework to improve compliance transparency.

The regulator has also taken steps to simplify compliance requirements, ease documentation norms, and make the transition from individual advisers to institutional entities smoother in a bid to attract more qualified professionals to the regulated advisory space.

The Sebi Chief said the long-term objective is to make the investment advisory ecosystem more trusted, scalable and accessible, while maintaining strong standards of investor protection.

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