Today is the last day to send your feedback to SEBI on the proposed amendments to the investment adviser regulations.
You will have to look at all three consultation papers before sending your feedback to SEBI.
There has been some confusion among stakeholders if the third consultation paper has to be seen along with the first two consultation papers or the third circular overrides the other two. Experts believe that the industry will have to look at all three consultation papers before sending their feedback to SEBI.
Here are the three key proposals outlined in the consultation paper:
- You can either charge a fee on financial advice or get commission on MF distribution. You will no longer be able to offer both financial advice and execution/distribution. RIAs cannot offer any execution services to clients either by setting up a separate entity or through a relative.
- Mutual fund distributors (MFDs) can only talk about the product features with client by ensuring the principle of ‘appropriateness’.
- Mutual fund distributors will have to disclose the list of fund houses they work with and can only talk about schemes of these fund houses.
SEBI defines appropriateness as selling the best-suited product to clients. However, SEBI has not mentioned if distributors can do asset allocation or risk profiling of their clients to ensure such a suitability.
You can send your feedback to sebiria@sebi.gov.in or post to Deputy General Manager, Investment Management Department, SEBI, SEBI Bhavan, Plot No. C4-A, G Block, BKC, Mumbai – 400051.
