Registered Investment Advisors (RIAs) and 'accredited investors' can now mutually decide the mode and quantum of fees for the service.
In a circular issued on Tuesday, SEBI said that the fee-related rules for advisory services to normal investors would not be applicable in case of accredited investors.
"It has been decided that in case of accredited investors, the limits and modes of fees payable to the RIA shall be governed through bilaterally negotiated contractual terms," SEBI said.
The rules have been relaxed for portfolio management services (PMS) as well. PMS and 'large accredited investors' can now decide the terms of exit load mutually.
"It has been decided that in case of large value accredited investors, the quantum and manner of exit load applicable to the client of the Portfolio Manager shall be governed through bilaterally negotiated contractual terms," the regulator stated.
The concept of accredited investor was introduced in India in June 2021. The move opened the doors for financial service providers to introduce customised investment products for sophisticated clients.
Accredited investors are those investors who have a better understanding of risks and returns associated with financial products.
