The Securities and Exchange Board of India (SEBI) has proposed to ease norms for registered investment advisers and research analysts.
Investment analysts (IAs) and research analysts (RAs) will be required to obtain the base NISM certifications only at the time of registration, without requiring a renewal every three years. After this, they will need to obtain a certification based only on the incremental changes or developments during the previous three years or a period as specified.
The experience requirement for IAs and RAs is proposed to be dispensed with.
Instead of maintaining a minimum net worth at all times, IAs and RAs will maintain a deposit that will be lien marked to stock exchanges towards dues arising out of arbitration and conciliation proceedings, if any, under the Online Dispute Resolution (ODR) Mechanism or any other mechanism.
Applicants who are individuals or partnership firms may be considered eligible for registration as part-time IA/RA if they are engaged in other business activity (other than that related to securities).
IAs and RAs may appoint an independent professional such as a CA, CS or CMA as compliance officers.
IAs can change the fee mode for a client at any time, without restriction on the minimum period between two fee mode changes. The maximum fee that can be charged by the IA will, however, not exceed higher of ₹1,25,000 per annum per family or 2.5 per cent of assets under advice per annum per family.
RAs can charge a maximum of ₹1,25,000 per annum per family for individual clients. This limit does not apply to non-individual clients, including accredited investors and institutional investors.
Individual IAs will be required to apply for registration as non-individual IAs upon having 300 clients or a fee collection of Rs 3 crore during the financial year, whichever is earlier.
An IA/RA who uses AI tools for servicing its clients must provide complete disclosure of the extent of the use of such tools to its prospective clients.