Most Important Terms and Conditions (MITC) for Investment Advisers
Summary
This circular mandates the inclusion of standardized Most Important Terms and Conditions (MITC) in investment advisory agreements by Investment Advisers. It establishes a compliance deadline of June 30, 2025, for existing clients to receive these terms via email or other preservable communication modes. The MITC outlines strict prohibitions on guaranteed returns, fee caps for individual clients, and protocols for grievance redressal and conflict of interest management.
Text
In terms of Regulation 19(1) (d) of the SEBI (Investment Advisers) Regulations, 2013, an Investment Adviser is required to enter into an investment advisory agreement with its client which shall include the Most Important Terms and Conditions standardized by Industry Standards Forum.
The MITC for the services of IAs, as standardized by the ISF for Investment Advisers in consultation with IAASB and SEBI is placed at Annexure A.
For existing clients, the MITC shall be informed by the IAs to the clients via email or any other suitable mode of communication by June 30, 2025.
The provisions of this circular shall come into force with immediate effect.
The Investment Adviser shall only accept payments towards its fees for Investment Advisory Services and is not permitted to accept funds or securities in its account on the client’s behalf.
The IA does not guarantee returns, accuracy, or risk-free investments. All advice is subject to market risks, and there is no assurance of any returns or profits.
Any assured/guaranteed/fixed returns schemes or any other schemes of similar nature are prohibited by law. No scheme of this nature shall be offered to the client by the IA.
In case of any services offered by IA related to products/services not under the purview of SEBI, IA shall make disclosure to the client and take appropriate declaration and undertaking from the client that such products/services do not come under regulatory purview of SEBI.
IA cannot execute/carry out any trade on behalf of the client without his/her/its specific and positive consent on every trade.
The fee charged by IA to the client will be subject to the maximum of amount prescribed by SEBI/IAASB from time to time (applicable only for Individual and HUF Clients).
IA may charge fees in advance if agreed by the client; such advance shall not exceed two quarters. In case of premature termination, the client shall be entitled to seek refund of proportionate fees only for unexpired period.
Fees to IA may be paid by the client through any of the specified modes like cheque, online bank transfer, UPI, etc. Cash payment is not allowed.
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Source: SecMarx — Most Important Terms and Conditions (MITC) for Investment Advisers. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.