Ease of doing business measures - Enabling Investment Advisers (“IAs”) to provide second opinion to clients on assets under pre-existing distri
Summary
SEBI amends the Master Circular for Investment Advisers to permit charging fees on assets under pre-existing distribution arrangements when providing a second opinion. The revised rule allows an AUA-based fee capped at 2.5% of the asset value per annum, subject to specific disclosure and consent requirements. This circular is issued immediately under Section 11(1) of the SEBI Act and Regulation 15A of the IA Regulations.
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IAs may charge fee on such assets subject to a limit of 2.5% of such assets value per annum.
In such cases, IAs must disclose and seek consent from such clients (on annual basis), that apart from the advisory fees payable to the IA, the clients will be incurring costs towards distributor consideration for such assets.
For clients seeking second opinion on assets under pre-existing distribution arrangement with other entity, IAs may charge fee on the assets under pre-existing distribution arrangement under AUA mode, subject to a limit of 2.5% of such assets value per annum. IAs shall, on annual basis, disclose and seek consent from such clients that apart from the advisory fees payable to the IA, the clients will be incurring costs towards distributor consideration for such assets.
The provisions of this circular shall come into effect immediately.
This circular is issued in exercise of powers conferred under Section 11(1) of Chapter IV of the Securities and Exchange Board of India Act, 1992 read with Regulation 15A of the SEBI (investment Advisers) Regulations, 2013 to protect the interests of investors in securities and to promote the development of, and to regulate the securities markets.
Source: SecMarx — Ease of doing business measures - Enabling Investment Advisers (“IAs”) to provide second opinion to clients on assets under pre-existing distri. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.