According to data compiled by Bloomberg, India’s stock market capitalization overtook Hong Kong’s on 23rd Jan 2024, making India the world’s fourth-largest stock market. With an increase in stock market investments primarily from average retail investors, a major challenge is witnessed. These investors lack sufficient market knowledge and hence need proper guidance from the experts.
Moreover, with the influx of social media, many investors rely on unfavorable investment advice from unreliable sources, leading to poor investment decisions. so-called investment advisors. Hence, SEBI (Securities and Exchange Board of India) released a guideline to help an advisor or business qualify as a SEBI-registered advisory firm to address this issue, to address this issue, SEBI (Securities and Exchange Board of India) released a guideline to help bean advisor or business qualifyied as a SEBI-registered advisory firm.
This informative piece discussesIn this informative piece, we discuss who a SEBI-registered investment advisor is and how one gets there!
About SEBI-Registered Advisory Firm/Individual
An investment advisor who is registered with SEBI and authorized has registered their rights to provide financial and investment advice to investors with SEBI is called a SEBI-registered investment advisor. To c In order to complete this registration procedure, the entity or individual has to pass multiple criteria, follow a code of conduct, fulfill requirements and optimal qualifications, and other norms.
This registered advisor usually offers advice on matters involving decisions like purchasing, selling, trading, investing, and otherwise dealing with shares and securities. The advice is usually communicated to you through oral, written, or other modes of communication, like emails and messages.
SEBI issued regulations for a Registered Investment Adviser (RIA), which includes:
- RIAs must be registered with SEBI and fulfill qualifications and experience requirements.
- RIAs must act in the client’s best interest
- RIAs must disclose all the aspects of investment to the client
- RIAs must comply with all SEBI regulations.
Eligibility Criteria For SEBI-Registered Advisory Firm/Individual
- Age: 21 years of age or above.
- Experience: 5 or more years of relevant experience; experience gained in the field of security or financial services investmentsinvestments in security or financial services.
- Legal Record: No past record of any financial/economic violation, fraud, or offense.
- Net Worth: As an individual, the minimum net worth should be ₹5,00,000. The minimum net worth should be ₹50,00,000 as an entity or non-individualAs an entity or non-individual, the minimum net worth should be ₹50,00,000.
- The individual or entity must not be a stockbroker or sub-broker, nor should they be a depository participant.
Qualifications For A SEBI-Registered Investment Advisor
Educational Qualification
The individual or individuals of the entity should possess a postgraduate degree or diploma (2 years of education after graduation) in finance, business management, accounts, economics, banking, insurance, or capital market. The central or state government must recognize these degrees to qualify as eligible.
Moreover, qualifying as a SEBI-registered advisory firm or completingto qualify as a SEBI-registered advisory firm or individual completion of NISM level 2 certification is required.
Experience
As mentioned above, the individual or entity must have relevant experience of at least 5 years. Relevant experience will translate into experience in dealing with financial advice, funds, securities, investments, asset management, or portfolio management.
Who Can Apply?
- A person
- A limited liability partnership
- A partnership firm
- A company
How To Register?
In order to register yourself or your firm with SEBI as investment advisors, you can submit Form A given on SEBI’s official website. This form will need you to submit a few documents as attachments. These documents are mentioned below:
- Identity proof, address, and contact
- Qualification proof
- Experience certificates
- The net worth certificates provided by Chartered Accountants
- CIBIL score
- Tax returns of the past three years
- Application fees (for individuals and firms, ₹5,000, and for corporate bodies, ₹25,000)
Summing It Up!
If you need viable advice for your investment portfolio and capitalize in the right place and at the right time, approaching the right direction is necessary. Successful trading, selling stocks at the right moment, or finding high-growth stocks in India, do it all with experts. Always take guidance from a reputed and expert SEBI-registered advisory firm.
Reference links:
How To Become SEBI Registered Investment Advisor – Fastlegal
Registered Investment Advisor – Meaning & Regulations by SEBI (scripbox.com)
British pound’s spike to burn a hole in the pockets of UK-bound students from India (livemint.com)
SEBI Registered Investment Advisor: Meaning & Eligibility | 5paisa
How To Become A Registered Investment Adviser In India (taxguru.in)
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