The market regulator may increase the transition period to become an RIA from 3 years to 5 years.
SEBI is not likely to incorporate feedback received by many stakeholders, including AMFI on allowing distributors to continue to provide incidental advice to their clients, said two people aware of this development.
SEBI is said to have discussed this with the members of Mutual Fund Advisory Committee (MFAC) and select distributors on Friday.
Earlier this month, AMFI had recommended that mutual fund distributors should be allowed to provide incidental advice to their clients. In its letter sent to SEBI, AMFI had said that incidental advice is intrinsic to the activity of mutual fund distribution and is different from ‘investment advisory’ including financial planning and risk profiling.
However, in a concession, the market regulator could extend the transition period to become an RIA from 3 years to 5 years, said one of the persons cited above.
He further told Cafemutual that SEBI is likely to introduce another category of RIAs called MF-RIA to help mutual fund distributors who find it difficult to meet requirements such as net worth of Rs. 1 lakh and educational qualifications. Such RIAs may not be allowed to advice on products other than mutual funds.
These officials expect SEBI to come out with final regulations soon.
