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Guidelines for Investment Advisors

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The Securities and Exchange Board of India (SEBI) is a government agency that regulates the securities market in India. SEBI can initiate civil actions, initiate criminal proceedings, initiate proceedings under the Income-tax Act, 1961 for any contravention of the provisions hereof or any other law relating to taxation. They have been entrusted with the following functions: (i) formulating and issuing directions and guidelines on various aspects of the securities market; (ii) overseeing compliance by all entities with the provisions of the SEBI. We will discuss “investment adviser” in this article.

What are Sebi’s Investment Advisory Services?

The SEBI Advisory Services are advisory services provided by Sebi exclusively to financial institutions, intermediaries, and investors. The SEBI Advisory Services play an important role in protecting the market integrity and investor interests in the equity market, which is one of the most successful stock markets in Asia. 

The Securities and Exchange Board of India (Sebi) is a government agency that provides guidance and oversight to the Indian securities market. One of their main mandates is to ensure that securities-related activities are conducted in a fair and orderly manner and not for profit.

What is the procedure for obtaining registration as an investment adviser from SEBI? 

The application shall be made in Form A as specified in the First Schedule of IA Regulations with necessary supporting documents. The procedure for obtaining registration as an Investment Adviser is available on the SEBI website under “Info for>Investment Advisers>How to get registered as an Investment Adviser”. (Source from SEBi)

Who can Apply for “SEBI Registered Investment Advisor”?

Any institution registered with SEBI is eligible to apply for registration as an investment advisor certification. These institutions can be Companies, Firms, Societies, Trusts, Indian Companies, or any other legal entity.

Financial Advisor License Requirements

Financial advisors are required to have a license to give investment advice. persons are required to obtain NISMSeries-X-A: Investment Adviser (Level 1) as well as NISM-Series-X-B: Investment Adviser (Level 2) certification.  All others are required to obtain both levels of NISM certification at the time of making an application for a grant of registration. 

SEBI regulations for a Registered Investment Adviser RIA

The Role of an Investment Advisory Company (IAC) is to provide investment-related information to potential and current clients. 

A Registered Investment Adviser RIA can be a company, an individual, or a partnership. The SEBI regulations for a Registered Investment Adviser RIA are as follows:-

  • It should have a minimum of ten advisors and five employees
  • It must be registered with SEBI
  • It should maintain a minimum net worth of Rs 5 crore
  • It should have adequate capital to bear risks

Conclusion

Financial advice is an important investment, but it’s important to be careful. This means understanding your finances and the broad spectrum of investments available to you. It also means finding an adviser who can provide detailed guidance on what options are best for you.

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