Last week, the Securities and Exchange Board of India (Sebi), as part of its effort to tighten the norms for giving investment advice, warned the public to deal only with Sebi-registered investment advisors (RIAs) and research analysts. Investors who heed the regulator’s advice are much less likely to fall victim to the twin malaise of poor-quality advice and mis-selling.
The Sebi (Investment Advisors) Regulations, issued in January 2013, made it mandatory for any person or entity that acts as an investment advisor to obtain a certificate of registration from the regulator. The first advantage of dealing with an RIA is that he would be properly vetted. He would have cleared the NISM Series-X-A and B exams. To obtain the certificate, he would have demonstrated that he possesses the required qualifications, infrastructure and capital.
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