Summary: Part-time Investment Advisers (IAs), as defined under SEBI’s IA Regulations, are individuals or partnerships engaged in other non-securities-related businesses or employment that do not involve managing client funds or providing investment advice. Eligibility for registration as a part-time IA includes professionals such as architects, lawyers, doctors, professors, and licensed insurance agents, as well as members of statutory self-regulatory organizations like ICAI, ICSI, or ICMAI. Applicants must meet the same qualifications and certifications required for full-time IAs. Part-time IAs must maintain a clear separation between investment advisory services and other activities, ensuring no conflicts of interest. They must disclose the nature of their non-IA activities to clients and provide a disclaimer highlighting that these services are outside SEBI’s purview. Additionally, part-time IAs are prohibited from providing unregistered investment advice or making performance claims about securities. In terms of Regulation 2(1)(qa) read with regulation 2(1)(pb) of IA Regulations, a part-time IA is an individual or partnership firm who is also engaged in any other business activity/employment which is unrelated to securities and does not involved in handling/ managing of money/ funds of client/ person or providing advice/ recommendation to any client/person in respect of any products/ assets for investment purposes.
WHO CAN ACT AS PART-TIME IA?
An applicant engages in any activity or business or employment permitted by any financial sector regulator or an activity under the purview of statutory-self-regulatory organisations such as ICSI, ICAI, ICMAI, etc. shall be considered eligible for registration as part time IA. A part-time IA shall have similar qualification and certification requirement as prescribed under IA regulations for full-time IAs.
Part-time IA shall provide an undertaking stating that it shall maintain arms-length relationship between its activity as IA and other activities and shall ensure that its investment advisory services are clearly segregated from all its other activities at all stages of client engagement.
Part-time IA shall provide disclaimer prominently (minimum 10 font size) and attracting the attention of the investor while providing their other service/raising invoice related to other business/service that the activity/invoice is related to services not under purview of SEBI and no complaint can be raised to SEBI for the services rendered therein.
The part-time IA shall disclose the nature of other activities to their clients and shall ensure that there is no conflict of interest between its IA activity and its other business activities or employment.
A person shall be considered eligible for registration as part-time IA if it-
i. is a member of ICAI or ICSI or ICMAI providing their statutory services or an insurance agent having license from Insurance Regulatory and Development Authority of India (‘IRDAI’).
ii. is professional such as an architect, lawyer, doctor etc.
iii. is employed as a professor or a teacher etc., or is engaged in education business or activity:
Provided that such person is not engaged in any of the two prohibited activities under Regulation 16A of Securities and Exchange Board of India (Intermediaries) Regulations, 2008 i.e.-
a. providing advice or any recommendation, directly or indirectly, in respect of or related to a security or securities, without being registered with or otherwise permitted by the SEBI to provide such advice or recommendation; and
b. making any claim, of returns or performance expressly or impliedly, in respect of or related to a security or securities, without being permitted by the SEBI to make such a claim.
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