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Who are Investment Advisors?
As per Investment Advisors Act of 1940, is a person who in return for fees, makes investment recommendation or conducts security analysis, whether through direct management of clients assets or via written publication. They basically provide advice relating to investing in, purchasing, selling or otherwise dealing in securities or investment products. The advice that can be given in written, oral or through any other mode of communication.
Obligations and responsibilities of Investment Advisors
1)They should act in fiduciary capacity and in the interest of its clients.
2)They bear the responsibility of not divulging any confidential information.
3)They should abide by code of conduct as specifies.
4)They should conduct risk profiling and risk assessment of the investor
5)It is their duty to ensure that investments should be suitable and appropriate to the risk profile of their client.
6)Written records should be maintained for a period of 5 years.
7)Proper system and procedure should be maintained for redressing grievances of clients.
2)They bear the responsibility of not divulging any confidential information.
3)They should abide by code of conduct as specifies.
4)They should conduct risk profiling and risk assessment of the investor
5)It is their duty to ensure that investments should be suitable and appropriate to the risk profile of their client.
6)Written records should be maintained for a period of 5 years.
7)Proper system and procedure should be maintained for redressing grievances of clients.
Post Registration compliances
1) Must comply with the reporting requirements as specified by SEBI from time to time.
2)They must have to regularly visit SEBI website for any updation/circulars/ guidelines issued time to time with respect to their market.
3)They must intimation to SEBI any material change in the details which has been already furnished to SEBI within a reasonable period of time.
2)They must have to regularly visit SEBI website for any updation/circulars/ guidelines issued time to time with respect to their market.
3)They must intimation to SEBI any material change in the details which has been already furnished to SEBI within a reasonable period of time.
FAQ
Common List Of Questioner That Our Customer Ask From Us -Solved !
Who Can Be The Investment Advisors?
An investment advisor can be in any form such as-
-Individual
-Body Corporate (including LLPs)
-Partnership Firms
But before becoming of an Investment advisor it is mandatory for them to get themselves registered with SEBI (Investment Advisors) Regulations, 2013.
-Individual
-Body Corporate (including LLPs)
-Partnership Firms
But before becoming of an Investment advisor it is mandatory for them to get themselves registered with SEBI (Investment Advisors) Regulations, 2013.
What is the procedure for getting registered as Investment Advisor ?
1) Applicant seeking to get himself registered as investment advisor shall file its application in form A along with the required documents provided in the regulation with a non-refundable fee. For individual firms fees of Rs. 5000/- is there whereas in case of Body corporate including LLPs fees of Rs. 25,000/- is there.
2) On the receipt of application, Board may require the applicant to furnish more documents or can also ask for any kind of clarification by calling them. The total time for its registration totally depends on how they fulfill all the requirements and provide all information in all respects.
3)Before gentaing of the certificate board will consider that whether an applicant is an individual or a Body corporate, and in case applicant is individual then he must possess the following qualification-
-A professional qualification or postgraduate degree or post graduate diploma in finance, accountancy, Business management, commerce, economics, capital marketing, banking, insurance or an institution recognized by the Central Government or State Government, or a Foreign institution or university or association.
- A graduate in any discipline with an experience of at least five years in activities related to advice in financial products or securities or fund or assets or portfolio management.
-Or other requirements as specified in regulation 7.
4. Whereas in case applicant is a Body corporate or LLP, then all those who provide investment advice must be a qualified professional as specified in regulation 7.
5. Applicant should fulfill the capital adequacy requirement as specified in regulation 7, that a Body corporate shall not be having net worth not less than 25 lakhs, whereas in case of an individual net worth should not be less than INR 1 Lakh.
6. Once the Board is satisfied that the applicant complies with all the requirements as specified in regulations, shall send the intimation to the applicant and on receipt of fees in case of individual and firms Rs. 10,000 and in case of Body Corporate including LLP Rs. 5,00,000/-.
After all the requirements Board will grant the certificate in form B as specified in regulations. It remains valid unless it shall be cancelled or suspended.
2) On the receipt of application, Board may require the applicant to furnish more documents or can also ask for any kind of clarification by calling them. The total time for its registration totally depends on how they fulfill all the requirements and provide all information in all respects.
3)Before gentaing of the certificate board will consider that whether an applicant is an individual or a Body corporate, and in case applicant is individual then he must possess the following qualification-
-A professional qualification or postgraduate degree or post graduate diploma in finance, accountancy, Business management, commerce, economics, capital marketing, banking, insurance or an institution recognized by the Central Government or State Government, or a Foreign institution or university or association.
- A graduate in any discipline with an experience of at least five years in activities related to advice in financial products or securities or fund or assets or portfolio management.
-Or other requirements as specified in regulation 7.
4. Whereas in case applicant is a Body corporate or LLP, then all those who provide investment advice must be a qualified professional as specified in regulation 7.
5. Applicant should fulfill the capital adequacy requirement as specified in regulation 7, that a Body corporate shall not be having net worth not less than 25 lakhs, whereas in case of an individual net worth should not be less than INR 1 Lakh.
6. Once the Board is satisfied that the applicant complies with all the requirements as specified in regulations, shall send the intimation to the applicant and on receipt of fees in case of individual and firms Rs. 10,000 and in case of Body Corporate including LLP Rs. 5,00,000/-.
After all the requirements Board will grant the certificate in form B as specified in regulations. It remains valid unless it shall be cancelled or suspended.
Who regulates Investment Advisory?
It is Governed by SEBI (Investment Advisors) Regulations, 2013.
What is a difference between Investment advisor and a registered representative?
An investment advisor should not be confused with Financial advisor a generic title that typically refers to stockbrokers or registered representative. Investment Advisors must be registered with SEC or a State securities regulator, depending upon the client asset under the management.
