With an aim to weed out unauthorised entities giving advice to investors, Market regulator Sebi on Wednesday said anyone seeking to act as an investment adviser would need to first obtain a certificate of registration for the same. This move would weed out unauthorised entities giving advice to investors.
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 and local offices across the country.
“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 (Securities and Exchange Board of India) said in a statement today.
The regulator 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 like 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 draft. 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.
As per the regulation, Sebi made it mandatory for investment advisers to register with the capital market regulator 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) and corporates — would have to segregate their investment advisory services from other activities.