Thanks to SEBI’s vigilance and crackdown on erring entities offering investment advice without registering with the regulator, many entities have applied to SEBI to register as RIA.
SEBI data shows that the number of RIA applications are increasing steadily since the last two years. In 2014, only two entities approached SEBI to register as RIA. In 2015, this number increased to 25.
In the current calendar year so far, as many as 61 entities, including individuals have filed applications with SEBI to register as RIA.
When SEBI introduced RIA regulations in 2013, around 100 entities registered themselves with SEBI in the first few months. The number has since then gone up to 367. As on April 2016, 88 applications are pending with SEBI to receive RIA license.
Industry experts say the number of RIAs is increasing due to a number of reasons. Apart from preferring to be on the right side of the law, some are self-motivated to register as RIA as they believe it gives them an edge over others.
While the RIA registrations are growing, the growth is still minuscule, say distributors. They say that the application and compliance costs are too high for anyone to register as RIA.
In 2014, SEBI raised the application fee for corporates and LLPs. Now, corporates and limited liability partners have to cough up Rs. 25,000 as application fee and Rs. 5 lakh as registration and renewal fee. Earlier, they had to pay Rs. 5,000 as application fee and Rs. 1 lakh as registration fee. Advisors have to pay the renewal fee every five years to retain their license.
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