MUMBAI: Markets regulator Sebi has amended norms governing investment advisers (IAs) and research analysts (RAs) to facilitate ease of doing business by providing relaxation in eligibility criteria for registration and simplifying the compliance requirements. In two separate notifications, Sebi said the minimum qualification requirement has been reduced to a graduate degree in specified fields and net-worth requirement has been replaced with the requirement of deposits.Further, it has introduced “part-time investment advisor” and “part-time research analyst” and the definition of investment advice/research service has been tweaked to exclude trading calls.
Relaxing the minimum qualification requirements for individuals associated with investment advice or research services, Sebi said that now graduates can become certified IA/RA.
However, mandatory NISM certifications have been introduced for individual investment advisors, principal officers of non-individual investment advisors and associated persons.
“Persons associated with investment advice/research services shall, at all times, have a minimum qualification of graduate degree in any discipline from a university or institution recognised by the Central Government or any State Government or a recognised foreign university or institution,” Sebi said.
Furthermore, Sebi now requires advisers/research analysts to maintain a deposit with a scheduled bank, with a lien marked in favor of a body recognised for overseeing investment advisers. This deposit will act as a safeguard in case of arbitration or dispute resolution proceedings.
The regulator said that an investment adviser/research analyst who uses Artificial Intelligence tools, irrespective of the scale and scenario of adoption of such tools, for servicing its clients shall be solely responsible for the security, confidentiality, integrity of the client data, use of any other information or data to arrive at investment advice, investment advice based on output of Artificial Intelligence tools and compliance with any law for the time being in force.”
Regarding the registration process, Sebi has introduced a separate registration form for part-time investment advisers.
Individual advisers with more than 300 clients or annual fees exceeding Rs 3 crore must transition to a non-individual registration within three months. Additionally, part-time advisers are limited to a maximum of 75 clients at any given time.
Non-individual investment advisers are also mandated to appoint a compliance officer who will ensure adherence to regulatory requirements.
