All you need to know about Investment Adviser registration

With SEBI’s Investment Adviser (IA) regulation coming into effect, here is a primer that tells you what to do if you want to register as an Investment Adviser (IA).

Who is an Investment Adviser (IA)?

An Investment Adviser (IA) has been defined as one who offers advice on buying, selling and dealing with securities and investment products for a consideration. An Investment Adviser (IA) is required to act in a fiduciary capacity towards their clients. Simply put, an IA is someone who uses a professional and client-centric approach in managing or advising clients on investments.

Is registration for IA necessary?

SEBI’s Investment Adviser regulation has come into effect from April 21, 2013 and you are required to submit your application for registration within 6 months, i.e. before October 20, 2013. After the effective date no person can act as an investment adviser unless he/she has obtained a certificate of registration from the board.

What are the qualifications for IA registration?

Sound product knowledge, professional qualification of at least post-graduation level or post-graduation diploma in finance, banking, insurance, accountancy, business management, commerce, economics, capital market or actuarial science from a university or an institution recognized by the central or state government or a recognized foreign university or association.

If graduate, the applicants must have five years of experience in finance profession or certificates in any of these subjects - financial planning, fund, asset, portfolio management or investment advisory services from NISM or any other recognized body.

Who is exempted from IA registration?

Mutual funds distributors providing any investment advice to clients incidental to their primary activity, Insurance agents, pension advisor, advocate, member of ICA, ICSI, ICWA, Actuarial Society of India, stock broker or sub broker under SEBI, fund managers of mutual fund houses and other person who may be later specified by SEBI.

What is the required net worth for IA registration?

For individual- a minimum asset of Rs 1 lakh is required.

For non-individual- a minimum net worth of Rs 25 lakh is necessary.

What will be the validity of IA registration?

The certificate of registration should be valid for a period of five years from the date of its issue. The certificate could be renewed before three months from the date of its expiry.

Who will grant the registration?

SEBI will provide grant of registration for practice of investment adviser in India.

In order to get registration you have to submit a duly signed application form to SEBI along with all the necessary documents which supports your eligibility for IA. All documents submitted are to be self-attested or stamped. If the applicants have already provided their services in financial advisory they have to mention such details in the cover letter of the application form.The applicants will receive an acknowledgement of application status from SEBI within a month’s time.

Fee structure for IA registration?

The application fee for the IA registration is Rs 5000.After the approval, the applicants have to pay registration fees of Rs 10,000 (for individual) and Rs 1, 00,000 (for non-individual).

Why should you look out for IA?

From October 21, 2013 no person is eligible to provide financial advice to their clients for a fee unless the person is registered as an IA or has applied to be registered as IA. Hence, it is now mandatory to have an investment adviser registration for practicing financial advisory profession.

Where can you submit the application for IA Registration?

The application could be submitted at the SEBI’s head office located in Mumbai. The application could also be submitted at its regional offices in Kolkata, Delhi, Chennai and Ahmedabad and local offices in Bengaluru, Bhubaneshwar, Guwahati, Hyderabad, Indore, Jaipur, Kochi, Lucknow and Patna.The addresses of the offices of SEBI are available on the website at www.sebi.gov.in and also on the link http://www.sebi.gov.in/sebiweb/stpages/contact_us.jsp.