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‘Sebi to regulate investment advisers’

The regulations would require investment advisers to register themselves separately with Sebi.

Written by Agencies | Mumbai |
August 16, 2012 8:13:22 pm

Market regulator Sebi today said entities providing paid investment advice to various market players will be regulated.

These ‘investment advisers’ would have to separately register themselves with Sebi and norms governing them have been framed after discussions with other regulators,including RBI and IRDA.

“After discussions with RBI,IRDA and PFRDA,Sebi has decided to start and implement investment adviser regulation,” Sebi chairman U K Sinha said.

Speaking to reporters after Sebi’s board meeting today,he said the regulation has also been discussed in other for a like FSDC (Financial Stability Development Council) sub- committee.

Almost a year ago,Sebi had floated a paper on regulating investment advisers and the same had received good response.

The regulations would require investment advisers to register themselves separately with Sebi.

For instance,if a bank is providing investment advice for a fee,then it would have to set up a separate subsidiary or a separate identifiable division for this purpose.

These entities would need to comply with minimum capital requirements.

“The philosophy behind this is that if anybody is providing advise for a fee,they would be regulated. If somebody is not providing for a fee,they will not be regulated,” Sinha said.

According to him,financial advisers would also be allowed to act as investment advisers.

“There are certain other categories like alternative investment funds might be giving advise even though it might not be their primary business.

“They are not covered and can continue with their work without getting registered with Sebi,” Sinha noted.

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