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SEBI GuideLine

SEBI GuideLine

The Securities and Exchange Board of India (Sebi) has proposed to revise the investment advisers regulations that will change the way mutual fund schemes are sold by these intermediaries. The capital market regulator may ask distributors of mutual fund products to register either as an advisor or as a distributor. A distributor gets a fee from the mutual fund for selling a product, while an advisor receives a fee from the investor for giving recommendations.

As per the proposals, independent financial advisors (IFAs), who do not register as Registered Investment Advisors (RIAs), will be renamed as mutual fund distributors. Those engaged in financial planning services will be required to register themselves as investment adviser. However, even if a distributor registers as an adviser, he will continue to receive trail income on his previous investments, the regulator said.

In India, 515 investment advisers are registered with Sebi as on September 28. The regulator has also proposed to bring brokers, portfolio managers,chartered accountants and company secretaries who give incidental advise to their clients within the ambit of the investment adviser regulations, in an attempt to bring uniform standards across all intermediaries providing advisory services.

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