MF News NSE bars traders from using ‘advisor’ nomenclature

NSE bars traders from using ‘advisor’ nomenclature

The circular is in line with the SEBI norms on Registered Investment Advisors.

Nishant Patnaik Feb 27, 2023

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NSE has asked its trading members and authorized persons not to use words like advisors, asset or wealth manager in their name.

The exchange platform believes that such a nomenclature misleads investors.

In a circular, NSE said, “It is observed by Exchange that Trading Members/Authorized Persons are using words such as Advisors, Asset/Wealth/Portfolio Management etc. in their name which is misleading and may indicate to the clients/investors that the Trading Members/Authorized Persons are registered for offering services other than broking services without having the applicable registration for those services with SEBI/other regulators.”

This norm is already applicable to mutual fund distributor from October 1, 2020. SEBI norms explicitly say that individuals other than SEBI registered investment advisor (MFDs in this case) cannot use words like advisor, consultant or coach.

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1 Comment

BeauSancy Consulting · 1 year ago `

Why it took 3 years after the same thing done to MFD?

Amendments to SEBI (Investment Advisers) Regulations, 2013 notified on July 3, 2020, a new sub-regulation (3) has been added under Regulation 3 as follows -

No person, while dealing in distribution of securities, shall use the nomenclature "Independent Financial Adviser or IFA or Wealth Adviser or any other similar name" unless registered with SEBI as an Investment Adviser.

For poor MFD, it was implemented in 2020 but for ultra rich trading members, who pays crores for membership fee, SEBI could open its eye only after 3 years.

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