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SEBI has allowed RIAs to collect advance fees of up to 1 year from individual and HUF clients.
Currently, RIAs are allowed to collect advance fee of up to two quarters from such clients.
However, SEBI has clarified that RIAs cannot receive advance fees from non-individual clients and accredited investors.
SEBI said, “It is further clarified that the fee related provisions such as fee limit, modes of payment of fees, refund of fees, advance fee, breakage fees shall only be applicable in case of individual and HUF clients (not being accredited investors). Thus, these conditions do not apply to non-individual clients, accredited investors, and in case of institutional investors seeking recommendation of proxy adviser. In such cases, fee related terms and conditions shall be governed through bilaterally negotiated contractual terms.”
