Registered investment advisors (RIAs) cannot tie up with foreign investment platforms to create stacks (a basket of foreign securities) for Indian investors, SEBI said in an informal guidance on Friday.
In response to a clarification sought by RIA SV Capital, SEBI said creating and rebalancing bouquet of international stocks for Indian investors on behalf of a foreign company does not "appear to be an activity for providing 'investment advice' as envisaged under the IA Regulations."
"The proposed services to be provided by SV Capital shall not come under the purview of IA Regulations. Hence, in the capacity of a SEBI registered investment adviser, SVC cannot provide the proposed service," SEBI responded.
In a letter sent to SEBI, SV Capital had sought informal guidance from the regulator to understand if it can strike a partnership with a foreign investment platform to jointly offer foreign trading services to Indian investors. In the letter, SV Capital stated that it won't advice its clients to invest through the platform and that it will only create bouquet of stocks for the platform in exchange for a fee.
