Obligations and Responsibilities of SEBI registered Investment advisors ?
Following are the obligations and responsibilities of SEBI registered investment advisors-
1.They should act in a fiduciary capacity and in the interest of its clients.
2.They have responsibility for not disclosing any confidential information of their clients to others.
3.They should abide by the code of conduct as specified.
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 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.
An investor can be in any form i.e. they can appear as an individual, as a Body Corporate (Including limited liability partnership (LLP)) or Partnership Firms.
Procedure for getting registered as a Investment Advisor ?
1. A person seeking to become a Financial Advisor must submit and Application Form A along with the required documents provided in the regulations with a non-refundable fee. Fee for individuals is Rs. 5000/- and for Body corporate including LLPs is Rs. 25000/- .
2. On the receipt of application, the Board if not satisfied then it may require an applicant to furnish further information or clarification or even may ask them to appear in person before the board regarding matters relevant to investment advisory services.
3. Before granting the certificate the Board will consider whether the applicant is an individual or a Body corporate or a firm. It is to be considered that if an applicant is an individual then must possess the following qualification-
-A professional qualification or postgraduate degree, or post graduate diploma in finance, business management, commerce, economics, capital markets, banking, insurance or an institution recognized by the central government or by any State Government or a recognized foreign University or association.
-A graduate in any discipline with an experience of at least five years in activities relating to advice in financial products or securities or fund or asset or portfolio management.
-Or other requirement specified in regulation 7.
4.In case of a Body corporate its net worth shall not be less than 25 Lakhs whereas in case of an individual or Partnership firm net worth should not be less than INR 1 Lakh.
5.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 as in the case of individuals and firms Rs. 10,000/- and for Body Corporate Rs. 5 Lakh.
Post Registration compliances?
1. Must comply with the reporting requirements as specified by SEBI from time to time.
2. They must have to visit SEBI website regularly for any updation/ circulars/Guidelines issued from time to time with respect to their market.
3. They must intimate to SEBI any material change in the details which has been already furnished to SEBI within a reasonable period of time.