SEBI Investments Advisors Registration- FAQ’s

Are you the one who can manage own portfolios and make right investment decisions? Are you among those to whom many of your relatives or may be friends call up to get advice on their portfolios but you couldn’t just because you are not registered as Investment Advisor.

So, if you are thinking of assisting people for making proper investment decisions you need to get yourself registered with SEBI as an Investment Advisor. The process of registration as Investment advisor is completely online and transparent

Questions you encounter once you decide to act as an Investment Advisor

A. Who is Investment Advisor?

As per SEBI IA regulation

“INVESTMENT ADVISER” means any person-

­¤ who for consideration,

¤ is engaged in the business of providing investment advice to clients or other persons or group of persons and includes any person who holds out himself as an investment adviser, by whatever name called.

This means Investment Adviser is a person who identifies investment opportunities available to his clients by understanding the financial situation, risk tolerance, and investment goals and makes investment recommendations and advice in return of fees. Many times they are also referred to as “Financial Advisors.”

B. Who can apply to be an Investment Advisor?

Both Individual and Non-Individual can apply for the said certificate, provided they should meet the eligibility and certification criteria defined under Regulation 7 of SEBI (Investment Advisors) Regulation, 2013

Unlike Individual applicant, in the case of non-Individual there is a separate individual person who will act as Principal Officer also the non-individual applicant can appoint persons who are associated with Investment Advice who will be responsible to give advice to the clients on behalf of the applicant non- individual. However, these principal Officer and the Person Associated with Investment Advice needs to comply with the eligibility and certification criteria.

C. Who is not required to get the mandatory registration under Investment Advisor regulations?

So instead speaking about who is mandatorily required to get registered, below points contains those activities for which registration as Investment Adviser are not mandatory as per the SEBI Investment Advisor Regulation: 

• Any person who gives general comments in good faith in regard to trends in the financial or securities market or the economic situation where such comments do not specify any particular securities or investment product;
• Any insurance agent or insurance broker who offers investment advice solely in insurance products and is registered with Insurance Regulatory and Development Authority for such activity;
• Any pension advisor who offers investment advice solely on pension products and is registered with Pension Fund Regulatory and Development Authority for such activity;
• Any distributor of mutual funds, who is a member of a self-regulatory organisation recognised by the Board or is registered with an association of asset management companies of mutual funds, providing any investment advice to its clients incidental to its primary activity; Any advocate, solicitor or law firm, who provides investment advice to their clients, incidental to their legal practise;
• ^I Any member of Institute of Chartered Accountants of India, Institute of Company Secretaries ^I of India, Institute of Cost and Works Accountants of India, Actuarial Society of India or any other professional body as may be specified by the Board, who provides investment advice to their clients, incidental to his professional service;
• ^I Any stock broker or sub-broker registered under SEBI (Stock Broker and Sub-Broker) ^I Regulations, 1992, portfolio manager registered under SEBI (Portfolio Managers) Regulations, 1993 or merchant banker registered under SEBI (Merchant Bankers) Regulations, 1992, who provides any investment advice to its clients incidental to their primary activity: Provided that such intermediaries shall comply with the general obligation(s) and responsibilities as specified in Chapter III of these regulations:
• Provided further that existing portfolio manager offering only investment advisory services may apply for registration under these regulations after expiry of his current certificate of registration as a portfolio manager
• Any fund manager, by whatever name called of a mutual fund, alternative investment fund or any other intermediary or entity registered with the Board;
• Any person who provides investment advice exclusively to clients based out of India: Provided that persons providing investment advice to Non-Resident Indian or Person of Indian Origin shall fall within the purview of these regulations;
• Provided that such [principal officer, persons associated with advice] and partner shall comply with regulation 7 of these regulations;
• Any other person as may be specified by the Board.

D. Who is Principal Officer ?

As mentioned earlier on behalf of every Non-Individual applicant a principal officer are authorised to advice its clients. He/she shall be the Managing Director or designated director or managing partner or executive chairman or equivalent management body of the Company/ LLP. In case of  Individual applicant, the individual shall act as the Principal officer

E. Are you ELIGIBLE to get registered as Investment Advisor?   Let’s find out..

F. Capital Adequacy/ Net-worth

An Individual or Non- Individual Applicant needs to have and maintain below mentioned Net worth at all the times:

¤ For Individual Capacity: – Net worth of not less than five Lakh rupees.

¤ For Non-Individual Capacity- Net worth not less than fifty lakh rupees.

G. What are the documents required for registration as Investment Advice?

At the time of filing the application, you need to pay the non-refundable application fee and once your registration is approved, you need to pay the Registration Fee for securing the registration and getting the printed certificate from BASL and SEBI.

IA fees valid for 5 years

BASL Annual Membership Fee Structure valid for 3 years

*Plus 18% GST on above amount.

I. Process for application of Investment Adviser License

Referring to the Circular No. 2021/06/18-01 dated June 18, 2021 and 2021-06-21-01 dated June 21, 2021, issued by BASL, the desirous person is first required to make the registration with BASL (BSE Administration & Supervision Ltd.) and once the same is approved registration by BASL, the same shall be forwarded by them to SEBI for approval. Post completion of registration from BASL and SEBI. The applicant shall receive two registration certificates from SEBI and BASL respectively.

We provide comprehensive compliance support programs and audit services to guide and support your firm through the maze of regulatory requirements. Feel free to contact us to discuss our offerings as per your compliance requirement. We will ensure that compliance is no more a burden for you and you can focus on your core advisory activities. We also provide services with respect to Company formation, filing of Annual Return of Companies and LLP, and other Secretarial services.

Disclaimer: The views and opinions expressed herein are my personal views and opinions and do not necessarily reflect the official policy and position of any other agency, organization, employer, or company. Assumptions made in the analysis are not of the position of any entity other than me. I make no representations as to the accuracy, completeness, correctness, suitability, or validity of any information and will not be liable for any errors, omissions, or damages arising from its use. It is the reader’s responsibility to verify their own facts