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Securities and Exchange Board of India

rules · 1992 · State unknown

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Parent: THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 (7c4c1f5343adab106c3a94cafc08a5ecf5957ae7)

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Ů Ů Ŋ Ŋ Securities and Exchange Board of India CIRCULAR SEBI/HO/MIRSD/ MIRSD-PoD-1/P/CIR/2025/003 January 08, 2025 To, All Registered Investment Advisers BSE Limited (Investment Adviser Administration and supervisory body- IAASB) Sir / Madam, Sub: Guidelines for Investment Advisers Securities and Exchange Board of India (SEBI), after considering the inputs from public consultation, has reviewed the framework for regulation of Investment Advisers (IA) and has notified Securities and Exchange Board of India (Investment Advisers) (Second Amendment) Regulations, 2024 (hereinafter referred to as "amendments to IA Regulations") on December 16, 2024. These amendments have come into force on the date of notification i.e. on December 16, 2024. The investment advisers shall ensure compliance with the aforesaid amendments to IA Regulations and the following guidelines specified under the amended SEBI (Investment Advisers) Regulations, 2013 (hereinafter referred to as "IA Regulations"): i. Deposit requirement: As per Regulation 8 of the IA Regulations, an investment adviser shall maintain a deposit of such sum, as specified by SEBI from time to time. The deposit requirements shall be based on the maximum number of clients of IA on any day of the previous financial year, as under: Ů Ů Ŋ Ŋ Securities and Exchange Board of India The deposit shall be maintained with a scheduled bank marked as lien in favor of Investment Adviser Administration and Supervisory body (IAASB), in the manner and form as may be specified by IAASB. The deposit amount may be revised for any change in applicable amount of deposit, based on the maximum number of clients on any day in the previous financial year, latest by 30th April of the subsequent financial year. The deposit requirements shall be reviewed by S

Rule TOC

15A · of the IA Regulations provide that IAs shall be entitled to charge fees from a client in the manner as specified by SEBI. In terms of the fee related provisions, IAs can charge fees under two modes, namely, (i) Assets under Advice ('AUA') mode, which is subject to a limit of 2.5 per cent of AUA per annum per family of client across all services offered by IA, and (ii) Fixed fee mode, which is subject to a specified fee limit (earlier limit ₹1,25,000) per annum per family of client across all services offered by IA.
22 · of the IA Regulations provides for the segregation of advisory and distribution activities by IA at family and group level.
19 · (1) (d) of the IA Regulations provides that IA shall enter into an investment advisory agreement with its clients. The agreement shall also include the Most Important Terms and Conditions (MITC) to be disclosed by IAs as may be specified by SEBI. MITC shall be standardised by industry standards forum (ISF) in consultation with IAASB and SEBI.
22A · of the IA Regulations provides that IAs may provide implementation services to the advisory clients in securities market. In this regard, IAs providing implementation/execution services shall maintain call recording of every consent for implementation/execution obtained from the client if advice/execution is given through telephone call. All such communications shall have time stamped to maintain clear audit trail.
3 · Applicability