Master Circular for Investment Advisers
Summary
This section establishes the Master Circular as a compilation of existing SEBI circulars for Investment Advisers, rescinding previous separate circulars while preserving past legal actions. It outlines the regulatory framework under Section 11(1) of the SEBI Act and provides a detailed table of contents covering guidelines, conduct measures, and administration. The text initiates specific guidelines requiring client-level segregation of advisory and distribution activities based on PAN and family status. This section details the mandatory agreement terms, fee structures, and qualification requirements for Investment Advisers. It outlines specific record-keeping, audit, and risk profiling obligations applicable to both individual and non-individual clients. Finally, it mandates the public display of registration details on all communication channels. This section mandates specific conduct measures for Investment Advisers, including prohibitions on free trials and cash fee collections. It establishes the framework for delegating administration and supervision to recognized bodies like stock exchange subsidiaries or IAASBs. The text outlines eligibility criteria for these supervisory
Text
In order to enable users to have access to the applicable circulars at one place, this Master Circular in respect of IAs is being issued.
The Master Circular is a compilation of all the existing/ applicable circulars issued by SEBI pertaining to IAs.
From the date of issuance of this Master Circular, the circulars mentioned in Appendix shall stand rescinded to the extent applicable to IAs.
Anything done or any action taken or purported to have been done or taken under the rescinded circulars, prior to such rescission, shall be deemed to have been done or taken under the corresponding provisions of this Master Circular.
Any application made to the Board under the rescinded circulars, prior to such rescission, and pending before it shall be deemed to have been made under the corresponding provisions of this Master Circular.
The previous operation of the rescinded circulars or anything duly done or suffered thereunder... shall remain unaffected as if the rescinded circulars have never been rescinded.
This circular is issued in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
Existing clients, who wish to take advisory services, will not be eligible for availing distribution services within the group/family of IA. Similarly, existing clients who wish to take distribution services will not be eligible for availing advisory services within the group/family of IA.
A new client will be eligible to avail either advisory or distribution services within the group/family of IA. However, the option to avail either advisory services or distribution services shall be made available to such client at the time of on boarding.
Permanent Account Number (PAN) of each client shall be the control record for identification and client level segregation.
In case of an individual client, “family of client” shall be reckoned as a single client and PAN of all members in “family of client” would jointly and severally be the control record.
The dependent family members shall be those members whose assets on which investment advisory is sought/provided, originate from income of a single entity i.e. earning individual client in the family. The client shall provide an annual declaration or periodic updation...
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Source: SecMarx — Master Circular for Investment Advisers. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.