HO/38/12/11(1)2025-MIRSD-POD/ I/71/2025 — THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

CIRCULAR HO/38/12/11(1)2025-MIRSD-POD/ I/71/2025 To, All Registered Investment Advisers Investment Adviser Administration and Supervisory Body (IAASB) Madam / Sir, Sub: Ease of doing business measures - Enabling Investment Advisers ("IAs") to provide second opinion to clients on assets under pre-existing distribution arrangement Clause 1.(iii)((f) of the Master Circular for Investment Advisers specifies that any portion of Assets Under Advice ("AUA") held by the client under any preexisting distribution arrangement with any entity shall be deducted from AUA for the purpose of charging fee by the IA and hence IAs are not allowed to charge AUA based fee on such assets . Industry association of IAs has represented that, if a client desires to avail a second opinion on assets, which are under any pre-existing distribution arrangement with any entity, the above provision restricts their ability to serve such clients and hence have sought that IAs should be permitted to charge AUA based fee in such scenarios and provide second opinion to their clients. Considering the above and in order to provide investors the opportunity of obtaining a second opinion on assets under pre-existing distribution arrangement with other entity , if so desired, the following has been decided: 3.1.IAs may charge fee on such assets subject to a limit of 2.5% of such assets value per annum. October 30, 2025 3.2. In such cases, IAs must disclose and seek consent from such clients (on annual basis), that apart from the advisory fees payable to the IA, the clients will be incurring costs towards distributor consideration for such assets. In view of above, the clause 1.(iii)((f) of the Master Circular for Investment Advisers shall stand revised and read as under: "F "For clients seeking second opinion on