Investment Advisors Registration With SBI
Who Are Investment Advisors?
As per the Investment Advisor Act 1940, an investment advisor can be a person or a group who in exchange for a fee give investment recommendations to the client (investors). They also conduct securities analysis either by written publications or through direct management of client’s assets. The investment advisors have a discretionary authority to act on behalf of their clients in the matters of investment and thus are allowed to take any action without obtaining any formal permission for the same.
The basic job of an investment consultant is to advise its clients (investors) in investment, buying, selling, or in any other deal related to investment products and securities. They also advise their clients on investment portfolios containing various investment products and securities (refer to Section 2(h) of Securities Contract Regulation Act 1956 to know what investment products come under the name of securities). The consultation given by these entities could be in any form (written, oral, or any other means).
Responsibilities of Investment Consultants Registered with SEBI
It is unlawful for any investment advisor to use any device or scheme to defraud any client or prospective client.
Features of Investment Advisors under SEBI
Investment Advisory as Per the Act
Under the Investment Advisory Act, the advisory which is widely available through mass media networks like news channels or newspapers and magazines would not be considered investment advisory. Investment advisories are specific to the client as per their risk profile which is confidential between the investment advisor and the investor. Whatever communication-related to buying, selling, or dealing in securities happens between the two is covered under the investment advisory.
Who can Apply for Investment Advisor License under SEBI?
Any person willing to conduct the business of giving consultations to investors related to their investments and holdings can apply to get the investment advisor licence from SEBI. However, SEBI has notified a few sections which cannot apply for the license of Investment advisors as per the norms. The regulations of SEBI exempts persons such as insurance agents, insurance brokers, pension advisors, stockbrokers, mutual fund distributors, sub-brokers, fund managers, portfolio managers, solicitors, advocates, firms, from applying for a license under its REGULATION 4 of IA ACT.
Eligibility Criteria to Get FPI Registration from SEBI
2. Partnership firms
3. Corporate body (including LLPs)
1. A graduate in any discipline with at least 5 years experience in activities related to giving consultations on financial products/securities/fund/asset/portfolio management.
2. A professional qualification related to finance or postgraduate degree or PG diploma in finance, business management, accountancy, commerce, capital market, economics, insurance, banking, from an institution recognized by the central government or any of the state governments or any recognized foreign university/institution/association.
3. Any other requirement as mentioned in Regulation 7 of the IA Act.
Procedure for Investment Advisor License from SEBI
After payment of the requisite fee, the board will grant the certificate of registration on Form B specified in the regulations. The certificate remains valid unless it is suspended or cancelled by the board.
Documents Required For Foreign Portfolio Investor SEBI Registration
The following documents are required for Depository Participant SEBI Registration:
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As per the rules any of the following can apply to be an Investment Advisor:
- Partnership firms
- Corporate body (including LLPs)
Investment advisories are specific to the client as per their risk profile which is confidential between the investment advisor and the investor. Whatever communication-related to buying, selling, or dealing in securities happens between the two is covered under the investment advisory. Under the Investment Advisory Act, the advisory which is widely available through mass media networks like news channels or newspapers and magazines would not be considered investment advisory.
For corporates including LLPs, a minimum net worth of Rs. 25 lakhs is required, and in the case of a partnership firm or and for the individual, the minimum net worth requirement is Rs. 1 lakh.