MASTER CIRCULAR
HO/38/12/11(2)2026-MIRSD-POD/I/4300/2026 February 06, 2026
To,
All Investment Advisers
Investment Adviser Administration and Supervisory Body (IAASB)
Dear Madam / Sir,
Subject: Master Circular for Investment Advisers
1. For effective regulation of Investment Advisers, the Securities and Exchange
Board of India has been issuing various Circulars from time to time.
2. In order to enable Investment Advisers and other market stakeholders to have
access to all applicable Circulars in the subject matter at one place, this Master
Circular is issued. This master circular has been updated to incorporate the
provision of the Circular(s) given in the appendix to this Master Circular.
3. With the issuance of this Master Circular, all directions/instructions contained in
the Circulars listed out in the Appendix to this Master Circular shall stand
rescinded to the extent they relate to Investment Advisers.
4. Notwithstanding such rescission,
a) 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under the rescinded circulars, prior to such rescission, shall be deemed to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;
b) Any application made to the Board under the rescinded circulars, prior to such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;
c) The previous operation of the rescinded circulars or anything done or suffered
thereunder, any right, privilege, obligation or liability acquired, accrued or
incurred under the rescinded circulars, any penalty, incurred in respect of any
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violation committed against the rescinded circulars, or any investigation, legal
proceeding or remedy in respect of any such right, privilege, obligation,
liability, penalty as aforesaid, shall not be affected by such rescission and shall
be enforceable as if the rescinded circulars had continued to be in force.
5. This Master Circular is issued in exercise of 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
6. This Master Circular is available on SEBI website at www.sebi.gov.in in the path
“Legal >Master Circulars”.
Yours faithfully
Aradhana Verma
General Manager
Tel. No. 022-26449633
aradhanad@sebi.gov.in
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TABLE OF CONTENTS
Sr. Subject Page
No. No.
I. GUIDELINES FOR INVESTMENT ADVISERS
1. G uidelines For Investment Advisers 6
II. MEASURES TO STRENGTHEN THE CONDUCT OF INVESTMENT ADVISERS
2. M easures to strengthen the conduct of Investment Advisers 24
III. ADMINISTRATION AND SUPERVISION OF INVESTMENT ADVISERS
3. F ramework for administration and supervision of Research Analysts and 26
Investment Advisers
4. R ecognition of BSE Limited as Research Analyst Administration and 27
Supervisory Body (RAASB) and Investment Adviser Administration and
Supervisory Body (IAASB)
IV. TECHNOLOGY RELATED
5. A dvisory for Financial Sector Organizations regarding Software as a Service 29
(SaaS) based solutions
V. INVESTOR COMPLAINTS
6. R edressal of investor grievances through SEBI Complaints Redress system 30
(SCORES) Platform and Online Dispute Resolution (ODR) Platform
7. In vestor Charter for Investment Advisers 31
VI. MISCELLANEOUS
8. P rocedure for seeking prior approval for change in control 33
9. P rior approval for change in control: Transfer of shareholdings among 35
immediate relatives and transmission of shareholdings and their effect on
change in control
10. A dvertisement code and usage of brand name/trade name 37
11. F acilitating transaction in Mutual Fund schemes through the Stock 42
Exchange Infrastructure
12. U nauthenticated news circulated by Market Intermediaries registered with 43
SEBI through various modes of communication
13. G uidelines on Outsourcing of Activities by Intermediaries 43
14. F ramework for Regulatory Sandbox 44
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Sr. Subject Page
No. No.
15. O ptional mechanism for fee collection by SEBI registered Investment 45
Advisers (IAs) and Research Analysts (RAs)
16. G eneral Guidelines for dealing with Conflicts of Interest of intermediaries 46
and their Associated Persons in Securities Market
17. A pproach to securities market data access and terms of usage of data 48
provided by data sources in Indian securities market
18. G uidelines on Anti-Money Laundering (AML) Standards and Combating the 48
Financing of Terrorism (CFT) /Obligations of Securities Market
Intermediaries under the Prevention of Money Laundering Act, 2002 and
Rules framed there under
19. N orms for sharing of real time price data to third parties 49
20. K now Your Client (KYC) norms for the securities market 49
21. R elaxation on geo tagging requirement in India for NRIs while 49
undertaking re-KYC
22. A ssociation of persons regulated by the Board and their agents with certain 50
persons
23. S implification of requirements for grant of accreditation to investors 50
24. R ecognition and operationalization of Past Risk and Return 51
Verification Agency (PaRRVA)
25. In terim arrangement for certified past performance of Investment Advisers 51
prior to operationalisation of Past Risk and Return Verification Agency
(“PaRRVA”)
26. S ervice platform for investors to trace inactive and unclaimed Mutual Fund 53
folios-MITRA (Mutual Fund Investment Tracing and Retrieval Assistant)
27. C ybersecurity and Cyber Resilience Framework (CSCRF) 53
28. A doption of Standardised, Validated and Exclusive UPI IDs for Payment 54
Collection by SEBI Registered Intermediaries from Investors
29. R ights of Persons with Disabilities Act, 2016 and rules made thereunder- 55
mandatory compliance by all Regulated Entities.
VII. REPORTING REQUIREMENTS
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Sr. Subject Page
No. No.
30. P eriodic reporting format for Investment Advisers 56
31. O ther reporting requirements 56
VIII. ANNEXURES
32. A NNEXURE A - Terms and conditions of agreement between IA and the 58
client
33. A NNEXURE B - Most Important Terms and Conditions (MITC) for 65
Investment Advisers
34. A NNEXURE C - Complaint Data to be displayed by IAs 67
35. A NNEXURE D - Detailed framework for RAASB and IAASB 69
36. A NNEXURE E - Advisory for Financial Sector Organizations Software as 75
a Service (SaaS) based solution
37. A NNEXURE F - Investor Charter in respect of IAs 77
38. A NNEXURE G - Declaration cum undertaking for seeking prior approval 83
for change in control
39. A NNEXURE H - Principles for Outsourcing for intermediaries 85
IX. APPENDIX: List of Circulars/ Notifications/ Communications 93
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I. GUIDELINES FOR INVESTMENT ADVISERS
1. Guidelines for Investment Advisers1
In accordance with the Securities and Exchange Board of India (Investment
Advisers) Regulations, 2013 (‘the IA Regulations’), IAs shall ensure
compliance with the following guidelines:
(i) Client Level Segregation of Advisory and Distribution Activities
To ensure client level segregation at IA’s group/family2 level, as per
Regulation 22(5) of the IA Regulations, following compliance and
monitoring process shall be adopted:
(a) 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.
(b) 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.
(c) Client under these guidelines shall include individual client or non-
individual client.
(d) The client shall have discretion to continue holding assets prior to
the applicability of this segregation under the existing
advisory/distribution arrangement. However, the client shall not be
forced to liquidate/switch such existing holdings.
1 Reference: Circular SEBI/HO/IMD/DF1/CIR/P/2020/182 dated September 23, 2020 and
SEBI/HO/MIRSD/ MIRSD-PoD-1/P/CIR/2025/003 dated January 08, 2025
2 “Group” and “family of an individual investment adviser” shall be as per Regulation 22(3)(iii) and
Regulation 2. (1) (gc) respectively of the IA Regulations
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(e) Permanent Account Number (PAN) of each client shall be the
control record for identification and client level segregation.
(f) In case of an individual client, “family of client”3 shall be reckoned
as a single client and PAN of all members in “family of client” would
jointly and severally be the control record. However, the same is not
applicable for non-individual clients.
(g) 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 as the case maybe in respect of such dependent family
members.
(h) IA shall, wherever available, advise direct plans (non-commission
based) of products only.
(i) The IAs shall maintain on record an annual certificate from an
auditor confirming compliance with the client level segregation
requirements as specified in Regulation 22 of the IA
Regulations. Such annual certificate shall be obtained within 6
months of the end of the financial year and form part of compliance
audit, in terms of Regulation 19(3) of the IA Regulations.”4
(j) The IAs providing investment advisory services exclusively to
institutional clients and accredited investors may not be subject to
compliance with the requirements of segregation of investment
advisory and distribution activities provided that the client/investor
signs a standard waiver stating the above.
3 “Family of client” shall be as per Regulation 2(1) (gb) of the IA Regulations.
4 Reference: Circular No. SEBI/HO/MIRSD/MIRSD-PoD1/P/CIR/2024/147 dated October 25, 2024
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(k) Stock broking activity is not considered as distribution activity for
the purpose of regulation 22 of IA Regulations.
(ii) Agreement between IA and the client
(a) Regulation 19(1)(d) of the IA Regulations provides that IA shall
enter into an investment advisory agreement with its clients. The
said agreement shall mandatorily cover the terms and conditions
provided in Annexure A and Most Important Terms and conditions
(MITC), as standardized by Industry Standard Forum in consultation
with IAASB and SEBI, provided in Annexure B5.
(b) MITC must include the following as terms and conditions::
“This agreement is for the investment advisory services provided by
the IA and IA cannot execute/ carry out any trade (purchase/ sell
transaction) on behalf of the client without his/her specific and
positive consent on every trade. Thus, you are advised not to permit
IA to execute any trade on your behalf without your explicit
consent.”
(c) IA shall incorporate the MITC into the investment advisory
agreement and shall disclose and take consent from clients on the
agreement.6
(d) Consent of client to agreement between IA and client may be signed
by the client in person or through any other legally acceptable mode
including DigiLocker enabled Aadhaar based e-signature facility.
(e) IAs shall also provide guidance to their clients in the agreement on
the optional ‘Centralised Fee Collection Mechanism for IA and RA’
(CeFCoM).
(f) IA can also include additional terms and conditions in the
5 Reference: Circular no. SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/19 dated February 17, 2025
6 For the existing clients as on February 17, 2025, the MITC shall be informed by the IAs to the clients via email
or any other suitable mode of communication (which can be preserved) by June 30, 2025.
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agreement without diluting the provisions of the IA Regulations and
amendments thereto as well as circulars issued thereunder.
(g) IA shall ensure that neither any investment advice is rendered nor
any fee is charged until the client has signed the aforesaid
agreement and provided copy of signed agreement to the client.
(iii) Fees7
(a) Regulation 15A of the IA Regulations provides that IAs shall be
entitled to charge fees from a client in the manner as specified by
SEBI. Accordingly, IAs can charge fees under two modes, namely,
(i) Assets under Advice (‘AUA’) mode, which is subject to a limit of
2.5 per cent of AUA per annum per family of client across all
services offered by IA, and (ii) Fixed fee mode, which is subject to
a specified fee limit (earlier limit ₹1,25,000) per annum per family
of client across all services offered by IA.
(b) The maximum fee that may be charged by the IA under the fixed
fee mode now stands revised and shall not exceed ₹1,51,000 per
annum per family of client. The fee limit shall be revised and
announced by IAASB once in three years based on the Cost
Inflation Index (CII) after due consultation with SEBI.
(c) In terms of the earlier provisions, IA could charge fees from a client
under any one mode, i.e., Assets under Advice (AUA) mode or fixed
fee mode on an annual basis. Change of mode, if any, could be
effected only after twelve months of on-boarding/last change of
mode.
In order to provide more flexibility in charging of fees, IAs have now
been allowed to change the fee mode for a client at any time, without
restriction on the minimum period between two fee mode changes.
The maximum fee that can be charged by the IA shall, however, not
7 Note:The fee limit and mode of fees payable for the existing Individual/HUF clients as on January 8, 2025,
shall remain unchanged till the expiry of the agreement, or up to June 30, 2025, whichever is earlier.
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exceed the higher of fee limit under the fixed fee mode or 2.5 per
cent of AUA per annum per family of client.
(d) The fee limits do not include statutory charges.
(e) IA shall be required to demonstrate AUA with supporting
documents like demat statements, unit statements etc. of the client.
(f) 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.8
(g) In terms of revised scope of the ‘investment advice’ under
Regulation 2(1)(l) of the IA Regulations, Investment advice related
to securities under purview of SEBI shall only fall under the purview
of IA Regulations. As provided under Regulation 2(1) (ac) of IA
Regulations, for the purpose of charging fee under AUA mode, AUA
shall mean the aggregate net asset value of securities under the
purview of SEBI. Accordingly, it is clarified that the limits on fee
chargeable to clients by IAs shall be applicable only in respect of
investment advice related to securities under purview of SEBI.
(h) If agreed by the client, IAs may charge fees in advance, however,
such advance shall not exceed fees for a period of one year.9
In the event of pre-mature termination of the IA services in terms of
agreement, the client shall be refunded the fees for unexpired
8 Reference: Circular No. HO/38/12/11(1)2025-MIRSD-POD/ I/71/2025 dated October 30, 2025
9 Reference: Circular No. SEBI/HO/MIRSD/ MIRSD-PoD/P/CIR/2025/48 dated April 02, 2025
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period. However, IA may retain a maximum breakage fee of not
greater than one-quarter fee.
(i) The fee related provisions such as fee limit, modes of payment of
fees, refund of fees, advance fee, breakage fees shall only be
applicable in case of individual and Hindu Undivided Family
(HUF) clients (provided these clients are not accredited investors)
of IAs. These provisions shall not be applicable in case of non-
individual clients and accredited investors. In case of non-
individual clients and accredited investors, fee related terms and
conditions shall be governed through bilaterally negotiated
contractual terms.
(iv) Deposit requirement10
(a) As per Regulation 8 of the IA Regulations, an investment adviser shall
maintain a deposit of such sum, as specified by the Board from
time to time. In this regard, it is specified that an IA shall maintain the
deposit in the form of units of liquid mutual fund or an overnight
mutual fund or as a deposit maintained with a scheduled bank. Such
deposit shall be marked as lien in favour of IAASB. The deposit
requirements shall be based on the maximum number of clients of IA
on any day of the previous financial year, as under:
No. of clients Deposit
Up to 150 clients ₹ 1 lakh
151 to 300 clients ₹ 2 lakh
301 to 1,000 clients ₹ 5 lakhs
1,001 and above clients ₹ 10 lakhs
10 Reference: Circular No. SEBI/HO/MIRSD/ MIRSD-PoD/P/CIR/2025/116 dated August 12, 2025
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(b) The deposit shall be marked as lien in favor of Investment Adviser
Administration and Supervisory body (IAASB), in the manner and
form as may be specified by IAASB.
(c) The deposit amount may be revised for any change in applicable
amount of deposit, based on the maximum number of clients on any
day in the previous financial year, latest by 30th April of the
subsequent financial year.
(d) IAASB shall put in place necessary systems and procedures for
implementation of these provisions and bring the same to the notice
of IAs.
(e) The deposit requirements shall be reviewed by SEBI from time to
time.
(v) Qualification and certification requirement
(a) Vide SEBI (Investment Advisers) (Amendment) Regulations, 2020,
enhanced qualification and experience requirement were introduced
under Regulation 7 of the IA Regulations for individual investment
adviser or a principal officer of a non-individual investment
adviser and persons associated with investment advice. Further, in
terms of second proviso of regulation 7 (1), it was specified that
existing individual IAs above fifty years of age (as on September
30,2020) shall not be required to comply with the enhanced
qualification and experience requirements.
(b) Subsequently, vide SEBI (Investment Advisers) (Second
Amendment) Regulations, 2024, experience requirement was
removed and qualification requirement was relaxed under Regulation
7 of the IA Regulations, effective from December 16, 2024. Further,
vide SEBI (Investment Advisers) (Second Amendment) Regulations,
2025, the qualification and certification requirement has been further
relaxed to inter alia provide that an applicant with graduate degree on
any equivalent qualification accompanied with relevant certification
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from NISM or from any other organization or institution accredited
by NISM, shall be eligible to act as Individual investment advisers or
principal officer of a non-individual investment adviser and persons
associated with investment advice, with effect from November 25,
2025.
(c) Vide SEBI (Investment Advisers) (Second Amendment) Regulations,
2025, as provided under Regulation 7(c), an applicant who has
completed Post Graduate Program in the Securities Market
(Investment Advisory) from NISM or a Post Graduate Program in
Financial Planning from NISM or any other program of NISM as may
be specified by the Board shall be eligible to act as Individual
investment advisers or principal officer of a non-individual investment
adviser and persons associated with investment advice.
In this regard, for sake of clarity, it has been specified that the
applicants who meet the qualification criteria provided under
Regulation 7(c) shall not be required to obtain initial entry level
certification (as applicable for applicants with other qualifications)
from NISM or from any other organization or institution accredited
by NISM. However, as provided under Regulation 7(2), such persons
shall be required to obtain relevant renewal certification from NISM
or from any other organization or institution accredited by NISM
within three years from the date of registration certificate.
(vi) Registration as Non Individual Investment Advisor
(a) Vide SEBI (Investment Advisers) (Second Amendment)
Regulations, 2025, Regulation 13(e) of the IA Regulations has been
amended to provide that an individual IA, whose number of clients
exceed three hundred at any point of time or the fee collected during
the financial year exceeds three crore rupees, whichever is earlier,
shall immediately intimate the Administration and Supervisory Body
and initiate the process of transition from individual to non-individual
investment adviser and apply for grant of in-principle approval for
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registration as non-individual investment adviser within 3 months
from the date on which the threshold is reached.
(b) Such application shall be made in FORM-A as per the IA
Regulations, along with the requisite fee and same shall be
assessed in accordance with the provisions of the IA
Regulations and amendments thereto as well as circulars issued
thereunder.
(c) The “number of clients” shall mean number of client agreements in
force at any point of time i.e. limit of 300 clients not to be exceeded
on any day.
(d) In order to ease the process of transition from individual IA to non-
individual IA, an individual IA shall initially be required to apply for
grant of in-principle approval for registration as non-individual IA and
shall complete the transition from registration as individual
investment adviser to non-individual investment adviser by end of
three months from the date on which of in-principle approval was
granted.
On completion of transition within the time limit, the IA shall
surrender his individual IA registration certificate and will be granted
final registration as non-individual IA subject to compliance with all
the requisite requirements of registration. During the transition
period, the individual IA shall be permitted to on-board new clients
and collect fees in excess of the threshold limit as provided
under Regulation 13 (g) of SEBI (Investment Advisers) Regulations,
2013.
(e) In case the aforesaid IA does not get registration as a non-individual
IA, such IA shall continue the advisory activities as an Individual IA
while ensuring the applicable limits on the number of clients and fee
collected.
(vii) Registration both as Investment Adviser and Research analyst
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In terms of the proviso to Regulation 9 of the IA Regulations, an
individual or partnership firm registered as a research analyst may be
granted certificate of registration as an investment adviser, subject to
such terms and conditions as the SEBI may deem fit and appropriate.
Accordingly, these terms and conditions are as under:
(a) A research analyst, who is an Individual or partner-ship firm,
registered under the SEBI (Research Analysts) Regulations, 2014
(RA Regulations), may be considered eligible for grant of certificate
of registration as IA under the IA Regulations provided that it shall
comply with the rules/regulations/reporting requirements under
each of these regulations viz. IA Regulations and RA Regulations
separately.
(b) Such IA/RA shall provide an undertaking stating that it shall maintain
arms-length relationship between its activity as IA and RA and shall
ensure that its investment advisory services and research services
are clearly segregated from each other.
(viii) Registration as part time Investment Adviser
(a) In terms of Regulation 2(1)(qa) read with regulation 2(1)(pb) of IA
Regulations, a part-time IA is an individual or partnership firm who is
also engaged in any other business activity/employment which is
unrelated to securities and does not involve handling/ managing of
money/ funds of client/ person or providing advice/ recommendation to
any client/person in respect of any products/ assets for investment
purposes.
(b) An applicant engaged in any activity or business or employment
permitted by any financial sector regulator or an activity under the
purview of statutory self-regulatory organisations such as Institute of
Chartered Accountants of India (‘ICAI’), Institute of Company
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Secretaries of India (ICSI), Institute of Cost Accountants of India (ICMAI)
etc. shall be considered eligible for registration as part-time IA.
(c) In terms of regulation 2(1)(m) read with regulation 7 of IA Regulations,
Part-time IAs shall be required to have similar qualification and
certification requirements as prescribed under IA regulations for full-time
IAs.
(d) Part-time IA shall provide an undertaking stating that it shall maintain
arms-length relationship between its activity as IA and other activities
and shall ensure that its investment advisory services are clearly
segregated from all its other activities at all stages of client engagement.
(e) Part-time IA shall provide disclaimer prominently (minimum 10 font size)
and attracting the attention of the investor while providing their other
service/raising invoice related to other business/service that the
activity/invoice is related to services not under purview of SEBI and no
complaint can be raised to SEBI for the services rendered therein.
(f) The part-time IA shall disclose the nature of other activities to their
clients and shall ensure that there is no conflict of interest between its
IA activity and its other business activities or employment.
(g) For the purpose of providing additional clarity as to whether a person
shall or shall not be considered eligible for registration as part-time IA,
reference may be made to the following explanations/illustrations
regarding other business activities or employment that a person shall
or shall not engage in.
Example/Illustration 1:
Who shall be considered eligible for registration as part-time IA?
A person shall be considered eligible for registration as part-time IA if it-
(i) is a member of ICAI or ICSI or ICMAI providing their statutory
services or an insurance agent having license from Insurance
Regulatory and Development Authority of India (‘IRDAI’).
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(ii) is professional such as an architect, lawyer, doctor etc.
(iii) is employed as a professor or a teacher etc., or is engaged in
education business or activity:
Provided that such person is not engaged in any of the two
prohibited activities under Regulation 16A of Securities and
Exchange Board of India (Intermediaries) Regulations, 2008 i.e.-
(a) providing advice or any recommendation, directly or indirectly,
in respect of or related to a security or securities, without being
registered with or otherwise permitted by the SEBI to provide
such advice or recommendation; and
(b) making any claim, of returns or performance expressly or
impliedly, in respect of or related to a security or securities, without
being permitted by the SEBI to make such a claim.
Example/Illustration 2:
Who shall not be considered eligible for registration as part-time IA?
If a person is engaged in a business/activity of providing
advice/recommendations on assets such as gold, real estate,
cryptocurrency etc., it shall not be considered eligible for registration as
part-time IA.
Example/Illustration 3:
Who is required to register as part-time IA?
If a CA for the purpose of tax planning/tax filing provides
advice/recommendation on securities as an asset class to its client
as an incidental advice to its primary activity, it is not required to get
registered as a part-time IA. However, if a CA is providing security-
specific advice to a specific client, even though as part of tax
planning/tax filing, it is required to seek registration as part-time IA.
(ix) Designation as ‘Principal Officer’
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(a) Regulation 2(1)(s) of IA Regulations provides that in case of non-
individual investment adviser being a partnership firm, one of the
partners shall be designated as its principal officer. It further
provides that in case no partner of the partnership firm registered
as an investment adviser has minimum qualification and
certification requirements provided under the IA Regulations, it
shall apply for registration as an investment adviser in the form of
a limited liability partnership or a body corporate within such time
as may be specified by the SEBI.
(b) Accordingly, a partnership firm registered as an investment
adviser, where no partner of the firm has the minimum qualification
and certification requirements provided under the Regulations,
were required to apply for registration as an investment adviser in
the form of a limited liability partnership or a body corporate latest
by September 30, 2025.
(x) Appointment of an independent professional as Compliance Officer
(a) In terms of Regulation 20 of the IA Regulations, a non-individual
investment adviser may appoint an independent professional who
is a member of ICAI or ICSI or ICMAI or member of any other
professional body as may be specified by the SEBI, provided such
a professional holds a relevant certification from NISM, as may be
specified by the SEBI. In such cases, the principal officer shall
submit an undertaking to IAASB/SEBI to the effect that principal
officer shall be responsible for monitoring the compliance in
respect of the requirements of the Act, regulations, notifications,
guidelines, instructions issued by SEBI/IAASB.
(b) A non-individual IA may appoint such an independent professional
as compliance officer who holds certifications from NISM by
passing the following certification examinations-
• NISM-Series-X-A: Investment Adviser (Level 1) Certification
Examination,
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• NISM-Series-X-B: Investment Adviser (Level 2) Certification
Examination,
• NISM-Series-X-C: Investment Adviser Certification (Renewal)
Examination, and
• NISM-Series-III A: Securities Intermediaries Compliance (Non-
Fund) Certification Examination
(xi) Clarity in activities that can be undertaken by IAs - scope of investment
advice
(a) In terms of scope of the ‘investment advice’ under Regulation 2(1)(l)
of the IA Regulations, Investment advice related to securities under
purview of SEBI shall only fall under the purview of IA Regulations.
(b) It is however noted that IAs may also provide financial planning
services to their clients and comprehensive financial planning may
include the investment advice related to products or services not
under the purview of SEBI. In this regard, the following is specified
for IAs providing investment advice related to products or services
not under the purview of SEBI to their clients-
For the products and services not under the purview of SEBI, IA
shall make disclosure to the client and take appropriate declaration
and undertaking from the client that that such products/services
and the services of IA in respect of such products/services do not
come under regulatory purview of SEBI and that no recourse is
available to them with SEBI for their grievances related to such
products/services or services of IA in respect of such
products/services. IAs shall make the aforesaid disclosure and
obtain appropriate declaration and undertaking while on-boarding
new client.11
11 For existing clients as on January 8, 2025, IAs shall ensure compliance with these
requirements latest by July 31, 2025.
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(xii) Use of Artificial Intelligence (‘AI’) tools in IA services
(a) In terms of Regulation 15(14) of the IA Regulations, an investment
adviser who uses Artificial Intelligence tools, irrespective of the
scale and scenario of adoption of such tools, for servicing its clients
shall be solely responsible for the security, confidentiality, integrity
of the client data, use of any other information or data to arrive at
investment advice, investment advice based on output of Artificial
Intelligence tools and compliance with any law for the time being
in force. Further, in terms of Regulation 18(9) of the IA Regulations,
an investment adviser shall disclose to the client the extent of use
of Artificial Intelligence tools in providing investment advice.
(b) Investment Adviser shall provide the disclosure of the extent of use
of Artificial Intelligence tools by them in providing investment
advice to their clients at the time of entering into the agreement
and make such additional disclosure whenever required.
(xiii) Maintenance of record
A. Regulation 19(1) of the IA Regulations provides that IA shall maintain
records with respect to his activities as an IA. In this regard, it is
clarified that:
a) IA shall maintain records of interactions, with all clients including
prospective clients (prior to onboarding), where any conversation
related to advice has taken place inter alia, in the form of:
i. Physical record written & signed by client,
ii. Telephone recording,
iii. Email from registered email id,
iv. Record of SMS messages,
v. Any other legally verifiable record.
b) Such records shall begin with first interaction with the client and
shall continue till the completion of advisory services to the client.
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B. Regulation 22A of the IA Regulations provides that IAs may provide
implementation services to the advisory clients in securities market.
In this regard, IAs providing implementation/execution services shall
maintain call recording of every consent for
implementation/execution obtained from the client if advice/execution
is given through telephone call. All such communications shall have
time stamped to maintain clear audit trail.12
C. IAs shall be required to maintain these records for a period of five
years. However, in case where dispute has been raised, such
records shall be kept till resolution of the dispute or if SEBI desires
that specific records be preserved, then such records shall be kept
till further intimation from SEBI
(xiv) Audit
(a) As per regulation 19(3) of the IA Regulations, IA shall conduct
annual audit in respect of compliance with SEBI (Investment
Advisers) Regulations, 2013 and circulars issued thereunder.
(b) Annual compliance audit report shall specify each of the provisions
of the IA Regulations and the circulars and guidelines issued
thereunder upon which compliance is reported.
(c) An IA shall -
(i) complete the annual compliance audit within six months from
the end of each financial year and submit a compliance audit
report to IAASB/SEBI within a period of one month from the date
of the audit report.
(ii) submit adverse findings of audit, if any, along with action taken
thereof duly approved by the individual IA or management of
12 IAs shall ensure compliance with requirements under this clause latest by June 30,
2025
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non-individual IA to IAASB/SEBI within a period of one month
from the date of the audit report but not later than October 31st
of each year for the previous financial year; and
(iii) maintain on record an annual certificate from a member of ICAI/
ICSI/ ICMAI or from an auditor confirming compliance with client
level segregation requirements. Such annual certificate shall be
obtained within six months of the end of the financial year and
form part of compliance audit, in terms of Regulation 19(3) of
the IA Regulations.
(d) IA shall publish the status of the compliance audit report on its
website and shall also publish the adverse findings of audit, if any,
along with the action taken thereof on their website. IA shall provide
the compliance audit report to its clients.
(e) IAs shall ensure compliance with the additional audit requirements
under this clause starting with audit report for financial year ending
March 31, 2025.
(xv) Risk profiling and suitability for non-individual clients
(a) Regulations 16 and 17 of the IA Regulations mandate risk profiling
and suitability for all categories of clients.
(b) In order to further enhance the risk profiling and encompass suitable
factors in case of non-individual clients, IA shall use the investment
policy as approved by board/management team of such non-
individual clients for risk profiling and suitability analysis.
(c) The discretion to share the investment policy/relevant excerpts of
the policy shall lie with the non-individual client. However, IA shall
have discretion not to onboard non-individual clients if they are
unable to do risk profiling of the non-individual client in the absence
of investment policy.
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(xvi) Requirement of website 13
In terms of Regulation 19A of IA Regulations, an investment adviser
shall maintain a functional website, which shall contain the details
as may be specified by SEBI.
(xvii) Display of details on website and in other communication channels
In order to protect the interest of investors and bring more transparency
in the functioning of the IAs, the IAs shall display the following
information prominently on its website, mobile app, printed or electronic
materials, know your client forms, client agreements and other
correspondences with the clients:
 Complete name of Investment Adviser as registered with SEBI,
 Type of Registration-Individual, Non-Individual
 Registration number, validity of registration,
 Complete address with telephone numbers,
 Contact details of the Principal Officer –contact no, email id etc.,
 Corresponding SEBI regional/local office address.
13 Existing IAs, as on January 8, 2025, shall confirm the details of its website to
IAASB latest by June 30, 2025.
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II. MEASURES TO STRENGTHEN THE CONDUCT OF INVESTMENT
ADVISERS
2. Measures to strengthen the conduct of Investment Advisers14
2.1 Restriction on free trial
As per the IA Regulations, investment advice can be given after completing
risk profiling of the client and ensuring suitability of the product. It has come
to the notice that IAs are providing advice on free trial basis without
considering risk profile of the client. Hence the IAs shall not provide free trial
for any products/services to prospective clients. Further, IAs shall not accept
part payments (where some part of the fee is paid in advance) for any
product/service.
2.2 Proper risk profiling and consent of client on risk profiling
Risk profiling of the client is essential to provide advice on suitable product
based on various criteria like income, age, securities market experience etc.
Registered IAs shall provide investment advice only after completing the
following steps: a. Complete the risk profile of the client based on information
provided by the client. b. Obtain consent of the client on completed risk
profile either through registered email or physical document.
2.3 Receiving fees though banking channel only
It is observed that the IAs are receiving advisory fee in the form of cash
deposit in their bank accounts or through payment gateways which does not
provide proper audit trail of fees received from the clients. To bring
transparency in dealing with the clients, IAs shall accept fees strictly by
account payee crossed cheques / demand draft or by way of direct credit
into their bank account through NEFT/ RTGS/IMPS/UPI. It is clarified that,
IAs shall not accept cash deposits.
2.4 Display of complaints status on website
14 Reference: Circular No. SEBI/HO/IMD/DF1/CIR/P/2019/169 dated December 27, 2019
Page 24 of 99
In order to bring more transparency and enable the investors to take
informed decision regarding availing of advisory services, IAs shall display
the following information on the homepage (without scrolling) of their
website/mobile app. The information should be displayed properly using font
size of 12 or above and made available on monthly basis (within 7 days of
end of the previous month) in a format as per Annexure C15:
15 Reference: Circular No. SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/80 dated June 02, 2025
Page 25 of 99
III. ADMINISTRATION AND SUPERVISION OF INVESTMENT ADVISERS
3. Framework for administration and supervision of Research Analysts and
Investment Advisers16
Background
3.1. In terms of Regulation 38A of the ‘SECC Regulations’17 notified on April 26,
2024, a recognised Stock Exchange may undertake the activities of
administration and supervision over specified intermediaries on such terms
and conditions and to such an extent as may be specified. Accordingly, Stock
Exchange shall now be recognised as RAASB18 and IAASB19 under
Regulation 14 of the ‘RA Regulations’20 and the IA Regulations for
administration and supervision of Research Analysts (‘RAs’) and Investment
Advisers (‘IAs’) respectively. The detailed framework for RAASB and IAASB
is specified in Annexure D.
3.2. As per clause (xi) of Regulation 6 of RA Regulations and clause (n) of
Regulation 6 of IA Regulations, an applicant seeking registration as RA and
IA is required to be enlisted with RAASB and IAASB respectively. The
provisions governing enlistment including enlistment of existing RAs/IAs and
of applicants whose registration applications are under process as on the
effective date of this circular are specified in the enclosed framework at
Annexure D.
Repeal and Savings with respect to the erstwhile IAASB framework
3.3. From the effective date of the provisions of clause 3, the erstwhile framework
for administration and supervision of IAs as specified through SEBI circular
number SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2021/579 dated June 18, 2021
stands rescinded.
16 Reference: Circular No. SEBI/HO/MIRSD/MIRSD-SEC-3/P/CIR/2024/34 dated May 2, 2024
17 SECC Regulations- Securities Contracts (Regulation) (Stock Exchanges and Clearing
Corporations) Regulations, 2018
18 RAASB- Research Analyst Administration and Supervisory Body
19 IAASB- Investment Adviser Administration and Supervisory Body
20 RA Regulations- SEBI (Research Analysts) Regulations, 2014
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3.4. In terms of regulation 30A of IA Regulations, notwithstanding the aforesaid
rescission, any action taken or purported to have been taken or any action
that may be taken against any person in relation to the membership of IAASB
recognised under regulation 14 of IA Regulations, as applicable in the
rescinded framework of IAASB, shall be deemed to have been done or taken
or may be taken under the corresponding provisions of the amended IA
Regulations.
Operationalization of RAASB and IAASB framework
3.5. Based on fulfillment of the criteria specified in Annexure D, a stock
exchange shall be granted recognition as RAASB and IAASB. To begin with,
in order to ensure efficiency in the system and economies of scale, RAASB
and IAASB shall be one and the same stock exchange.
4. Recognition of BSE Limited as Research Analyst Administration and
Supervisory Body (RAASB) and Investment Adviser Administration and
Supervisory Body (IAASB)21
4.1. In pursuance of SEBI circular no. SEBI/HO/MIRSD/MIRSD-SEC-
3/P/CIR/2024/34, dated May 2, 2024, BSE Limited, has been granted
recognition under Regulation 14 of the ‘RA Regulations’ and ‘IA Regulations’
for administration and supervision of Research Analysts (‘RAs’) and
Investment Advisers (‘IAs’) respectively as RAASB and IAASB for a period
of five years starting from July 25, 2024.
Formulation of bye-laws, SOPs, FAQs etc. by RAASB/IAASB
4.2. BSE shall formulate bye-laws with respect to its activities as RAASB and
IAASB and shall issue circulars, Standard Operating Procedures (SOPs),
Frequently Asked Questions (FAQs), etc. to provide guidance and ensure
smooth adoption of the RAASB and IAASB framework by RAs and IAs.
Administrative fees payable to RAASB/IAASB
21 Reference: Circular No. SEBI/HO/MIRSD/MIRSD-POD-1/P/CIR/2024/101 dated July 12, 2024
Page 27 of 99
4.3. Applicants seeking registration/renewal as RA/IA shall be liable to pay
administrative fees, as specified by RAASB/IAASB.
4.4. The other terms and conditions as specified in the SEBI circular
SEBI/HO/MIRSD/MIRSD-SEC-3/P/CIR/2024/34 dated May 2, 2024 shall
continue to apply.
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IV. TECHNOLOGY RELATED
5. Advisory for Financial Sector Organizations regarding Software as a Service
(SaaS) based solutions22
5.1. Ministry of Electronics & Information Technology, Govt. of India (MoE&IT),
has informed SEBI that the financial sector institutions are availing or
thinking of availing Software as a Service (SaaS) based solution for
managing their Governance, Risk & Compliance (GRC) functions so as to
improve their cyber Security Posture. As observed by MoE&IT, though SaaS
may provide ease of doing business and quick turnaround, but it may bring
significant risk to health of financial sector as many a time risk and
compliance data of the institution moves beyond the legal and jurisdictional
boundary of India due to nature of shared cloud SaaS, thereby posing risk
to the data safety and security.
5.2. In this regard, Indian Computer Emergency Response Team (CERT-in) has
issued an advisory for Financial Sector organizations. The advisory has been
forwarded to SEBI for bringing the same to the notice of financial sector
organization. The advisory can be viewed at Annexure E.
5.3. It is advised to ensure complete protection and seamless control over the
critical systems at your organizations by continuous monitoring through
direct control and supervision protocol mechanisms while keeping the critical
data within the legal boundary of India.
5.4. The compliance of the advisory shall be reported half yearly by IAs to SEBI
with an undertaking, “Compliance of the SEBI circular for Advisory for
Financial Sector Organizations regarding Software as a Service (SaaS)
based solutions has been made.”
22 Reference: Circular No. SEBI/HO/MIRSD2/DOR/CIR/P/2020/221 dated November 03, 2020.
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V. INVESTOR COMPLAINTS
6. Redressal of investor grievances through SEBI Complaints Redress system
(SCORES) Platform and Online Dispute Resolution (ODR) Platform 23
6.1. SEBI has been taking various measures to create awareness among
investors about grievance mechanisms available to them through workshops
as well as through print and electronic media.
6.2. As an additional measure and for information of all investors who deal/
invest/ transact in the market, the IAs shall prominently display in their offices
the following information about the grievance redressal mechanism available
to investors:
Dear Investor,
In case of any grievance / complaint against the investment adviser:
 Please contact Compliance Officer of the investment adviser (Name and
Address) / email-id (xxx.@email.com) and Phone No. - 91- XXXXXXXXXX.
 You may also approach CEO / Partner / Proprietor (Name) / email- id
(xxx.@email.com) and Phone No. - 91-XXXXXXXXXX.
 If not satisfied with the response of the investment adviser you can lodge your
grievances with SEBI at http://scores.gov.in or you may also write to any of
the offices of SEBI. For any queries, feedback or assistance, please contact
SEBI Office on Toll Free Helpline at 1800 22 7575 / 1800 266 7575.
6.3. IAs are also advised to refer to the following circulars on the redressal of
investor grievances through the SEBI Complaints Redressal System
(SCORES) platform and Online Dispute Resolution (ODR) Platform.
23 Reference: Circular No.CIR/MIRSD/3/2014 dated August 28, 2014,
SEBI/HO/OIAE/IGRD/CIR/P/2023/156 dated September 20, 2023 and SEBI/HO/OIAE/OIAE_IAD-
3/P/CIR/2023/195 dated July 31, 2023 (updated as on December 28, 2023)
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i. Circular No. SEBI/HO/OIAE/IGRD/CIR/P/2023/156 dated September
20, 2023 issued by SEBI on the ‘Redressal of investor grievances
through the SEBI Complaint Redressal(SCORES) Platform and linking
it to Online Dispute Resolution platform’ at the following link:
https://www.sebi.gov.in/legal/circulars/sep-2023/redressal-of-investor-
grievances-through-the-sebi-complaint-redressal-scores-platform-and-
linking-it-to-online-dispute-resolution-platform_77159.html
ii. Master Circular No. SEBI/HO/OIAE/OIAE_IAD-3/P/CIR/2023/195 dated
July 31, 2023 issued by SEBI on ‘Online Resolution of Disputes in the
Indian Securities Market’ at the following link (updated as on December
28, 2023):
https://www.sebi.gov.in/legal/master-circulars/dec-2023/master-
circular-for-online-resolution-of-disputes-in-the-indian-securities-
market_80236.html
7. Investor Charter for Investment Advisers24
7.1 SEBI, vide Circular no. SEBI/HO/IMD/IMD-II CIS/P/CIR/2021/0686 dated
December 13, 2021, inter alia, issued Investor charter for Investment
Advisers.
7.2 In a move to enhance financial consumer protection alongside enhanced
financial inclusion and financial literacy and in view of the recent
developments in the securities market including introduction of Online
Dispute Resolution (ODR) platform and SCORES 2.0, it has been decided
to modify the investor charter for Investment Advisers.
7.3 In view of the above and based on consultation with Industry Standards
Forum (ISF) for Investment Advisers, updated investor charter for Investment
Advisers is placed at Annexure F. All IAs are required to bring the investor
charter to the notice of their clients.
24 Reference: Circular No. SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/80 dated June 2, 2025
Page 31 of 99
7.4 In this regard, BSE Limited (presently recognized as IAASB) has been
directed to advise Investment Advisers to bring the Investor Charter to the
notice of their clients (existing as well as new clients) through disclosing the
Investor Charter on their respective websites and mobile applications (if any),
making them available at prominent places in the office, provide a copy of
Investor Charter as a part of client on-boarding process, through e-mails/
letters etc.
7.5 Additionally, in order to ensure transparency in the Investor Grievance
Redressal Mechanism, all the Investment Advisers shall continue to disclose
on their respective websites and mobile applications (if any), the data on
complaints received against them or against issues dealt by them and
redressal thereof, latest by 7th of succeeding month, as per the format
enclosed at Annexure C to this circular.
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VI. MISCELLANEOUS
8. Procedure for seeking prior approval for change in control25
8.1. Regulation 15(11) of the IA Regulations, IA shall obtain prior approval of
SEBI in case of change in control.
8.2. To streamline the process of providing approval to the proposed change in
control of IA (hereinafter referred as IA or applicant), it has been decided as
under:
i. IA shall make an online application to IAASB/SEBI for prior approval.
ii. The online application shall be accompanied by the following
information/ declaration/ undertaking about itself, the acquirer(s)/ the
person(s) who shall have the control and the directors/ partners of the
acquirer(s)/ the person(s) who shall have the control:
a. Current and proposed shareholding pattern of the applicant
b. Whether any application was made in the past to SEBI seeking
registration in any capacity but was not granted? If yes, details
thereof.
c. Whether any action has been initiated/ taken under Securities
Contracts (Regulation) Act, 1956 (SCRA)/ Securities and Exchange
Board of India Act, 1992 (SEBI Act) or rules and regulations made
thereunder? If yes, the status thereof along with the corrective action
taken to avoid such violations in the future. The acquirer/ the person
who shall have the control shall also confirm that it shall honour all
past liabilities/ obligations of the applicant, if any.
d. Whether any investor complaint is pending? If yes, steps taken and
confirmation that the acquirer/ the person who shall have the control
shall resolve the same.
25 Reference: Circular No. SEBI/HO/MIRSD/ MIRSD-PoD-2/P/CIR/2022/163 dated November 28,
2022
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e. Details of litigation(s), if any.
f. Confirmation that all the fees due to SEBI/IAASB have been paid.
g. Declaration cum undertaking of the applicant and the acquirer/ the
person who shall have the control (in the format specified at
Annexure G), duly stamped and signed by their authorized
signatories that:
i. there will not be any change in the Board of Directors of
incumbent, till the time prior approval is granted;
ii. pursuant to grant of prior approval by SEBI, the incumbent shall
inform all the existing investors/ clients about the proposed
change prior to effecting the same, in order to enable them to
take informed decision regarding their continuance or otherwise
with the new management; and
iii. the ‘fit and proper person’ criteria as specified in Schedule II of
Securities and Exchange Board of India (Intermediaries)
Regulations, 2008 are complied with.
h. In case the incumbent is a registered stock broker, clearing member,
depository participant, in addition to the above, it shall obtain
approval /NOC from all the stock exchanges/clearing
corporations/depositories, where the incumbent is a
member/depository participant and submit self-attested copy of the
same to SEBI.
iii. The prior approval granted by SEBI shall be valid for a period of six
months from the date of such approval within which the applicant shall
file application for fresh registration pursuant to change in control.
8.3. To streamline the process of providing approval to the proposed change in
control of an IA in matters which involve scheme(s) of arrangement which
needs sanction of the National Company Law Tribunal (“NCLT”) in terms of
the provisions of the Companies Act, 2013, the following has been decided:
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i. The application seeking approval for the proposed change in control of
the IA shall be filed with SEBI prior to filing the application with NCLT.
ii. Upon being satisfied with compliance of the applicable regulatory
requirements, an in-principle approval will be granted by SEBI;
iii. The validity of such in-principle approval shall be three months from the
date issuance, within which the relevant application shall be made to
NCLT.
iv. Within 15 days from the date of order of NCLT, the IA shall submit an
online application in terms of clause 8.2 along with the following
documents to SEBI for final approval:
a. Copy of the NCLT Order approving the scheme;
b. Copy of the approved scheme;
c. Statement explaining modifications, if any, in the approved scheme
vis-à-vis the draft scheme and the reasons for the same; and
d. Details of compliance with the conditions/ observations, if any,
mentioned in the in-principle approval provided by SEBI.
9. Prior approval for change in control: Transfer of shareholdings among
immediate relatives and transmission of shareholdings and their effect on
change in control26
In line with clarification provided for certain intermediaries vide circular no.
SEBI/HO/MIRSD/DOR/CIR/P/2021/42, the following is clarified with respect to
transfer of shareholding among immediate relatives and transmission of
shareholding in respect of investment advisers (IAs), research analysts (RAs) and
KYC (Know Your Client) registration agencies (KRAs):
9.1 Transfer /transmission of shareholding in case of unlisted body corporate
intermediary:
26 Reference: Circular Nos. SEBI/HO/MIRSD/ MIRSD-PoD-1/P/CIR/2024/164 dated December 27, 2024
Page 35 of 99
In following scenarios, change in shareholding of the intermediary will not be
construed as change in control:
a) Transfer of shareholding among immediate relatives shall not
result into change in control. Immediate relative shall be construed
as defined under Regulation 2(1)(l) of SEBI (Substantial
Acquisition of Shares and Takeovers) Regulations, 2011 which
inter-alia includes any spouse of that person, or any parent,
brother, sister or child of the person or of the spouse;
b) Transfer of shareholding by way of transmission to immediate
relative or not, shall not result into change in control.
9.2 Transfer /transmission of shareholding in case of a proprietary firm type
intermediary:
In case of an intermediary being a proprietary concern, the transfer or
bequeathing of the business/capital by way of transmission to another person
is a change in the legal formation or ownership and hence by the definition of
change in control, such transmission or transfer shall be considered as change
in control. The legal heir / transferee in such cases is required to obtain prior
approval and thereafter fresh registration shall be obtained in the name of legal
heir/transferee.
9.3 Transfer /transmission of ownership interest in case of partnership firm type
intermediary:
Change in partners and their ownership interest of the partnership firm type
intermediary shall be dealt in following manner:
a) Transfer of ownership interest in case of partnership firm: In case
a SEBI registered entity is registered as a partnership firm with
more than two partners, then inter-se transfer amongst the
partners shall not be construed to be change in control. Where the
partnership firm consists of two partners only, the same would
stand as dissolved upon the death of one of the partners. However,
if a new partner is inducted in the firm, then the same would be
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considered as a change in control, requiring fresh registration and
prior approval of SEBI.
b) Transmission of ownership interest in case of partnership firm:
Where the partnership deed contains a clause that in case of death
of a partner, the legal heir(s) of deceased partner be admitted, then
the legal heir(s) may become the partner (s) of the partnership firm.
In such scenario the partnership firm is reconstituted. Bequeathing
of partnership right to legal heir(s) by way of transmission shall not
be considered as change in control.
9.4 Incoming entities/ shareholders becoming part of controlling interest in the
intermediary pursuant to transfer of shares from immediate relative /
transmission of shares (immediate relative or not), need to satisfy the fit and
proper person criteria stipulated in Schedule II of SEBI (Intermediaries)
Regulations, 2008.
9.5 IAASB and RAASB shall-
a) bring the provisions of this circular to the notice of the IAs and RAs
respectively and also disseminate the same on its website;
b) make necessary amendments to the relevant Bye-laws, Guidelines,
Standard Operating Procedures, Rules and Regulations for the
implementation of the above decision
10. Advertisement code and usage of brand name/trade name27
10.1. Investment Advisers shall ensure compliance with the advertisement code
as prescribed below:
a. Forms of communication:
27 Reference: Circular Nos. SEBI/HO/MIRSD/ MIRSD-PoD-2/P/CIR/2023/51 dated April 05, 2023 and
SEBI/HO/MIRSD/ MIRSD-PoD-2/P/CIR/2023/52 dated April 06, 2023
Page 37 of 99
i. Advertisement shall include all forms of communications, issued by
or on behalf of IA, that may influence investment decisions of any
investor or prospective investor.
ii. The forms of communications, to which the advertisement code shall
be applicable, shall include pamphlets, circulars, brochures,
notices, research reports or any other literature, document,
information or material published, or designed for use in any
publication or displays (such as newspaper, magazine, sign
boards/hoardings at any location), in any electronic, wired or
wireless communication (such as electronic mail, text messaging,
messaging platforms, social media platforms, radio, telephone, or in
any other form over the internet) or over any other audio-visual form
of communication (such as television, tape recording, video tape
recordings, motion pictures) or in any other manner whatsoever.
b. Information/disclosures in the advertisement:
The information/disclosures that the advertisement shall contain, include
the following-
i. Name of the IA as registered with SEBI, registered office address,
SEBI Registration No., logo/brand name/trade name of IA, and CIN
of the IA, if applicable.
ii. Information which is accurate, true and complete in unambiguous
and concise language.
iii. Standard warning in legible fonts (minimum 10 font size) which
states “Investment in securities market are subject to market risks.
Read all the related documents carefully before investing”. No
addition or deletion of words shall be made to/from the standard
warning.
iv. In audio-visual media based advertisements, the standard warning
in visual media based advertisement and accompanying voice over
reiteration shall be audible in a clear and understandable manner.
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For example, in standard warning both the visual and the voice over
reiteration containing 20 words running for at least 10 seconds may
be considered as clear and understandable.
v. Whenever the advertisement is being issued in a language other
than English, it will be ensured that the standard warning is
accurately translated in the language of the advertisement.
vi. In case the mode of advertisement is SMS/Message/Pop-up, social
media etc. and the details such as full name, logo/brand name, full
registered office address, SEBI registration number, membership
number of a SEBI recognized supervisory body and standard
disclaimer are not mentioned, then official website hyperlink should
be provided in such SMS/Message/Pop-up, etc. and the website
must contain all such details.
vii. In case any specific security/ securities are displayed in the
advertisement as examples, disclaimer that "The securities quoted
are for illustration only and are not recommendatory" should be
mentioned.
viii. Advertisements and communications/correspondences with clients
shall include the disclaimer that “Registration granted by SEBI,
enlistment with IAASB and certification from NISM in no way
guarantee performance of the IA or provide any assurance of returns
to investors.”
c. Prohibitions in the advertisement:
The advertisement shall not contain:
i. Anything which is prohibited for publication under the law.
ii. Statements which are false, misleading, biased or deceptive, based
on assumptions or projections.
iii. Any misleading or deceptive testimonials.
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iv. Statements which, directly or by implication or by omission, may
mislead the investor.
v. Any statement likely to be misunderstood or likely to disguise the
significance of the same or any other statement contained in the
advertisement.
vi. Any statement designed to exploit the lack of experience or
knowledge of the investors.
vii. Any statement that is exaggerated or is inconsistent with or
unrelated to the nature and risk and return profile of the product.
viii. Extensive use of technical or legal terminology or complex language
and the inclusion of excessive details which may distract the
investors.
ix. Reference to any report, analysis, or service as free, unless it
actually is free and without condition or obligation.
x. Any promise or guarantee of assured or risk free return to the
investors.
The advertisement shall not imply any assured returns or minimum
returns or target return or percentage accuracy or service provision
till achievement of target returns or any other nomenclature that
gives the impression to the client that the investment advice is risk-
free and/or not susceptible to market risks and/or that it can generate
returns with any level of assurance.
xi. Any statement which directly or indirectly discredits other
advertisements or intermediaries or makes unfair comparisons or
ascribes any qualitative advantage over other intermediaries directly
or indirectly.
xii. Reference to past performance or risk-return metrics in respect of
the services of Investment Adviser unless such risk-return metrics
are verified by Past Risk and Return Verification Agency (PaRRVA)
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and claims using such metrics are made in the manner specified by
SEBI.
xiii. Superlative terms such as “Best”, “No. 1”, Top Adviser, “Leading”,
“One of the best amongst market leaders”, etc. so as to provide any
endorsement of quality or standing of the IA. However, factual
details of awards received by the IA from independent organizations
may be included.
xiv. Advertisements shall not include SEBI Logo.
d. Other compliances/requirements:
i. Prior approval for the advertisement/material shall be obtained from
SEBI recognized supervisory body.
ii. In the event of suspension of any IA by SEBI and/or by SEBI
recognized supervisory body, the IA so suspended shall not issue
any advertisement either singly or jointly with any other IA, during
the period of suspension.
iii. The IA/RA shall not engage in games, leagues, schemes,
competitions etc. which may involve distribution of prize monies,
medals, gifts, etc.
iv. These norms shall be applicable to any other
investment/research/consultancy agency associated with the IA
concerned and issuing advertisement wherein the IA has been
named in the advertisement.
v. Copy of the advertisement shall be retained by IA for a period of five
years in terms of Regulation 19(2) of the IA Regulations.
vi. Any additional guidelines as may be specified by SEBI or SEBI
recognized supervisory body from time to time.
10.2. In order to ensure the transparency in usage of brand name/trade name/logo,
IA shall ensure that:
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i. The information such as name of the IA as registered with SEBI, its logo,
its registration number and its complete address with telephone numbers
shall be prominently displayed on portal/web site, if any, notice board,
display boards, advertisements, publications, know your client forms and
client agreements.
ii. The information such as name of the IA as registered with SEBI, its logo,
its registration number, its complete address with telephone numbers,
the name of the compliance officer, his telephone number and e-
mail address, the name, telephone number and e-mail address of
the grievance officer or the grievance redressal cell shall be displayed
prominently in statements or reports or any other form of
correspondence with the client.
iii. Disclaimer that “Registration granted by SEBI, enlistment with BSE and
certification from NISM in no way guarantee performance of the IA or
provide any assurance of returns to investors” shall be mentioned on
portal/web site, if any, notice board, display boards, advertisements,
publications, know your client forms, client agreements, statements or
reports or any other form of correspondence with the client.
iv. SEBI logo shall not be used by IA.
11. Facilitating transaction in Mutual Fund schemes through the Stock
Exchange Infrastructure28
Registered IAs are allowed to use infrastructure of the recognized stock
exchanges to purchase and redeem mutual fund units directly from Mutual Fund/
Asset Management Companies on behalf of their clients, including direct plans.
28 Reference: Circular No. SEBI/HO/MRD/DSA/CIR/P/2016/113 dated October 19, 2016
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12. Unauthenticated news circulated by SEBI Registered Market Intermediaries
through various modes of communication29
IAs are directed that:
i. Proper internal code of conduct and controls should be put in place.
ii. Employees/temporary staff/voluntary workers etc. employed/working in the
Offices of market intermediaries do not encourage or circulate rumours or
unverified information obtained from client, industry, any trade or any other
sources without verification.
iii. Access to Blogs/ Chat forums/Messenger sites etc. should either be restricted
under supervision or access should not be allowed.
iv. Logs for any usage of such Blogs/Chat forums/Messenger sites (called by any
nomenclature) shall be treated as records and the same should be maintained
as specified by the IA Regulations.
v. Employees should be directed that any market related news received by them
either in their official mail/personal mail/blog or in any other manner, should
be forwarded only after the same has been seen and approved by the IA’s
Compliance Officer. If an employee fails to do so, he/she shall be deemed to
have violated the various provisions contained in SEBI Act/Rules/Regulations
etc. and shall be liable for action. The Compliance Officer shall also be held
liable for breach of duty in this regard30.
13. Guidelines on Outsourcing of Activities by Intermediaries31
13.1. SEBI Regulations for various intermediaries require that they shall render at
all times high standards of service and exercise due diligence and ensure
proper care in their operations.
13.2. It has been observed that often the intermediaries resort to outsourcing with
a view to reduce costs, and at times, for strategic reasons.
13.3. Outsourcing may be defined as the use of one or more than one third party
29 Reference: Circular No. CIR/ISD/1/2011 dated March 23, 2011
30 Circular CIR/ISD/2/2011 dated March 24, 2011.
31 Circular CIR/MIRSD/24/2011 dated December 15, 2011.
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– either within or outside the group - by a registered intermediary to perform
the activities associated with services which the intermediary offers.
13.4. Principles for Outsourcing
The risks associated with outsourcing may be operational risk, reputational
risk, legal risk, country risk, strategic risk, exit-strategy risk, counter party
risk, concentration and systemic risk. The principles for outsourcing are
given in Annexure H.
13.5. Activities that shall not be Outsourced:
The intermediaries desirous of outsourcing their activities shall not, however,
outsource their core business activities and compliance functions. An
example of core business activity may be – execution of orders and
monitoring of trading activities of clients in case of stock brokers. Regarding
Know Your Client (KYC) requirements, the intermediaries shall comply with
the provisions of SEBI {KYC (Know Your Client) Registration Agency}
Regulations, 2011 and Guidelines issued thereunder from time to time.
13.6. Other Obligations:
Reporting to Financial Intelligence Unit (FIU) - The intermediaries shall
be responsible for reporting of any suspicious transactions / reports to FIU
or any other competent authority in respect of activities carried out by the
third parties.
14. Framework for Regulatory Sandbox32
14.1. The Objective of Regulatory Sandbox is to grant certain facilities and
flexibilities to the entities regulated by SEBI so that they can experiment with
FinTech solutions in a live environment and on limited set of real users for a
limited time frame.
32 Reference: Circular No. SEBI/HO/ITD/ITD/CIR/P/2021/575 dated June 14, 2021 and
SEBI/HO/MIRSD/MIRSD_IT/P/CIR/2021/0000000658 dated November 16, 2021
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14.2. The guidelines pertaining to the functioning of the Regulatory Sandbox are
available at the link below:
https://www.sebi.gov.in/legal/circulars/jun-2021/revised-framework-for-
regulatory-sandbox_50521.html and
https://www.sebi.gov.in/legal/circulars/nov-2021/framework-for-regulatory-
sandbox_53982.html
15. Optional mechanism for fee collection by SEBI registered Investment
Advisers (IAs) and Research Analysts (RAs)33
15.1 With growing interest in the securities market, there is a need for a
mechanism for an investor to discern whether payment of fees is being made
only to a registered IA/RA. In order to create a closed and transparent
payment ecosystem, consultations were held with relevant stakeholders on
the proposal of a separate centralized mechanism for fee collection by IAs
and RAs.
15.2 Pursuant to public consultation and various discussions with stakeholders,
the “Centralized Fee Collection Mechanism for IA and RA” (CeFCoM) has
been operationalized to facilitate collection of fees by registered IAs and RAs
from their clients
15.3 Under this mechanism, clients shall pay fees to IAs/RAs, through a
designated platform/portal administered by recognized Administration and
Supervisory Body (ASB).
15.4 The mechanism has been co-created by BSE Limited with the help of various
stakeholders. The operational framework for the mechanism shall be as
specified by BSE. The mechanism has been made operational from October
01, 2024.
15.5 Though the mechanism is optional, ASB (administration and supervisory
body), in the interest of investors, shall take steps to encourage clients and
the registered IAs and RAs to avail the services of this mechanism.
33 Reference: Circular No. SEBI/HO/MIRSD/MIRSD-POD-1/P/CIR/2024/120 dated September 13, 2024
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Registered IAs and RAs shall encourage their clients to use this mechanism.
16. General Guidelines for dealing with Conflicts of Interest of intermediaries
and their Associated Persons in Securities Market.34
16.1. All intermediaries are presently governed by the provisions for avoidance of
conflict of interest as mandated in the regulations read with relevant circulars
issued from time to time by SEBI. On the lines of Principle 8 of the
International Organisation of Securities Commissions (IOSCO) Objectives
and Principles of Securities Regulations, it has been decided to put in place
comprehensive guidelines to collectively cover such intermediaries, for
elimination of their conflict of interest, as detailed hereunder.
16.2. Intermediaries shall adhere to these guidelines for avoiding or dealing with
or managing conflict of interest. They shall be responsible for educating their
associated persons for compliance of these guidelines.
16.3. For the purpose of these guidelines "associated persons" shall have the
same meaning as defined in Securities and Exchange Board of India
(Certification of Associated Persons in the Securities Markets) Regulations,
2007.
16.4. Intermediaries and their associated persons shall,
i. lay down, with active involvement of senior management, policies and
internal procedures to identify and avoid or to deal or manage actual or
potential conflict of interest, develop an internal code of conduct
governing operations and formulate standards of appropriate conduct in
the performance of their activities, and ensure to communicate such
policies, procedures and code to all concerned;
ii. at all times maintain high standards of integrity in the conduct of their
business;
iii. ensure fair treatment of their clients and not discriminate amongst them;
34 Reference: Circular CIR/MIRSD/5/2013 dated August 27, 2013.
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iv. ensure that their personal interest does not, at any time conflict with their
duty to their clients and client’s interest always takes primacy in their
advice, investment decisions and transactions;
v. make appropriate disclosure to the clients of possible source or potential
areas of conflict of interest which would impair their ability to render fair,
objective and unbiased services;
vi. endeavor to reduce opportunities for conflict through prescriptive
measures such as through information barriers to block or hinder the
flow of information from one department/ unit to another, etc.;
vii. place appropriate restrictions on transactions in securities while handling
a mandate of issuer or client in respect of such security so as to avoid
any conflict;
viii. not deal in securities while in possession of material non published
information;
ix. not to communicate the material non published information while dealing
in securities on behalf of others;
x. not in any way contribute to manipulate the demand for or supply of
securities in the market or to influence prices of securities;
xi. not have an incentive structure that encourages sale of products not
suiting the risk profile of their clients;
xii. not share information received from clients or pertaining to them,
obtained as a result of their dealings, for their personal interest;
16.5. The Boards of intermediaries shall put in place systems for implementation
of the aforementioned guidelines and provide necessary guidance enabling
identification, elimination or management of conflict of interest situations.
The Boards shall review the compliance of the above guidelines periodically.
16.6. The said guidelines shall be in addition to the provisions, if any, contained in
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respective regulations/ circulars issued by the Board from time to time
regarding dealing with conflict of interest, in respect of intermediaries.
17. Approach to securities market data access and terms of usage of data
provided by data sources in Indian securities market35
17.1. IAs are advised to make note of the following:
“As far as the data provided by various data sources in Indian securities
markets pursuant to regulatory mandates for reporting and disclosure in
public domain are concerned, such data should be made available to users,
‘free of charge’ both for ‘viewing’ the data as also for download in the format
as specified by regulatory mandate for reporting, as well as their usage for
the value addition purposes.”
17.2. Further, apart from the data made available free of cost, data which is
chargeable should be appropriately identified as such in public domain.
18. Guidelines on Anti-Money Laundering (AML) Standards and Combating the
Financing of Terrorism (CFT) / Obligations of Securities Market
Intermediaries under the Prevention of Money Laundering Act, 2002 and
Rules framed there under
IAs are advised to refer to the following circulars with respect to ‘Guidelines on
Anti-Money Laundering (AML) Standards and Combating the Financing of
Terrorism (CFT) /Obligations of Securities Market Intermediaries under the
Prevention of Money Laundering Act, 2002 and Rules framed there under’ :
i. Master Circular issued on June 06, 2024 available at the following link:
https://www.sebi.gov.in/legal/master-circulars/jun-2024/guidelines-on-anti-
money-laundering-aml-standards-and-combating-the-financing-of-terrorism-
cft-obligations-of-securities-market-intermediaries-under-the-prevention-of-
money-laundering-act-2002-a-_83942.html
35 Reference: Circular SEBI/HO/DEPA-III/DEPA-III_SSU/P/CIR/2022/25 dated Feb 25,2022
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19. Norms for sharing of real time price data to third parties
IAs are advised to refer to circular no. SEBI/HO/MRD/MRD-PoD-3/P/CIR/2024/56
dated May 24, 2024 on ‘Norms for sharing of real time price data to third parties’
available at:
https://www.sebi.gov.in/legal/circulars/may-2024/norms-for-sharing-of-real-time-
price-data-to-third-parties_83572.html
20. Know Your Client (KYC) Norms for the Securities market
IAs are advised to refer to the following master circular and circulars:
i. Master Circular No. SEBI/HO/MIRSD/SECFATF/P/CIR/2023/169 dated
October 12, 2023 on ‘Know Your Client (KYC) norms for securities market’
available on SEBI website at: https://www.sebi.gov.in/legal/master-
circulars/oct-2023/master-circular-on-know-your-client-kyc-norms-for-the-
securities-market_77945.html
ii. Circular No. SEBI/HO/MIRSD/SECFATF/P/CIR/2024/79 dated June 06, 2024
on ‘Uploading of KYC information by KYC Registration Agencies (KRAs) to
Central KYC records Registry (CKYCRR)’ available at:
https://www.sebi.gov.in/legal/circulars/jun-2024/uploading-of-kyc-information-
by-kyc-registration-agencies-kras-to-central-kyc-records-registry-ckycrr-
_84006.html
iii. Circular No. SEBI/HO/MIRSD/SECFATF/P/CIR/2025/74 dated May 23, 2025
on ‘Accessibility and Inclusiveness of Digital KYC to Persons with Disablities’
available at:
https://www.sebi.gov.in/legal/circulars/may-2025/accessibility-and-
inclusiveness-of-digital-kyc-to-persons-with-disabilities_94096.html
21. Relaxation on geo tagging requirement in India for NRIs while undertaking
re-KYC
IAs are advised to refer to circular no. HO/38/30/12(1)2025-MIRSD SEC FATF
dated December 10, 2025 on ‘Relaxation on geo tagging requirement in India for
NRIs while undertaking re-KYC’ available at:
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https://www.sebi.gov.in/web/?file=https://www.sebi.gov.in/sebi_data/attachdocs/
dec-2025/1765366958310.pdf#page=1&zoom=page-width,-15,842
22. Association of persons regulated by the Board and their agents with certain
persons
IAs are advised to refer to the following circulars with respect to Association of
Persons regulated by the Board:
i. Circular No. SEBI/HO/MIRSD/ MIRSD-PoD-1/P/CIR/2024/143 dated
October 22, 2024 on ‘Association of Persons regulated by the Board and
Their agents with certain persons’ available at:
https://www.sebi.gov.in/legal/circulars/oct-2024/association-of-persons-
regulated-by-the-board-and-their-agents-with-certain-persons_87837.html
ii. Circular No. SEBI/HO/MIRSD/ MIRSD-PoD-1/P/CIR/2025/11 dated January
29, 2025 on ‘Details/clarifications on provisions related to association of
persons regulated by the Board, MIIs, and their agents with persons
engaged in prohibited activities’ available at:
https://www.sebi.gov.in/legal/circulars/jan-2025/details-clarifications-on-
provisions-related-to-association-of-persons-regulated-by-the-board-miis-
and-their-agents-with-persons-engaged-in-prohibited-activities_91356.html
23. Simplification of requirements for grant of accreditation to investors
IAs are advised to refer to the following circulars with respect to accreditation to
investors:
i. Circular No. SEBI/HO/IMD/IMD-I/DF9/P/CIR/2021/620 dated August 26, 2021
on ‘Modalities for implementation of the framework for Accredited Investors
available at: https://www.sebi.gov.in/legal/circulars/aug-2021/circular-on-
modalities-for-implementation-of-the-framework-for-accredited-
investors_52116.html
ii. Circular No. SEBI/HO/AFD/PoD1/CIR/2023/189 dated December 18, 2023 on
‘Simplification of requirements for grant of accreditation to investors” available
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at: https://www.sebi.gov.in/legal/circulars/dec-2023/simplification-of-
requirements-for-grant-of-accreditation-to-investors_79990.html
24. Recognition and operationalization of Past Risk and Return
Verification Agency (PaRRVA)
Regulation 16D and 16E of the ‘Securities and Exchange Board of India
(Intermediaries) Regulations, 2008’ (“Intermediaries Regulations”), provide for
verification of risk and return metrics by a Past Risk and Return Verification
Agency (“PaRRVA”). Accordingly, in terms of the aforesaid regulations, claims
may be made by IAs, in terms of risk and return metrics verified by PaRRVA. In
this regard, IAs are advised to refer to circular no. SEBI/HO/MIRSD/MIRSD-
POD/P/CIR/2025/51 dated April 4, 2025 on ‘Recognition and operationalization
of Past Risk and Return Verification Agency (PaRRVA)’ available at:
https://www.sebi.gov.in/legal/circulars/apr-2025/recognition-and-
operationalization-of-past-risk-and-return-verification-agency-parrva-_93321.html
25. Interim arrangement for certified past performance of Investment Advisers
prior to operationalisation of Past Risk and Return Verification Agency
(“PaRRVA”)36
(i) Considering the representation of the industry to facilitate IAs to communicate
past performance data to clients for the period prior to operationalisation of
PaRRVA, as an interim arrangement, the following has been decided:
a) IAs may provide past performance data certified by a member of ICAI/ICMAI
to a client (including prospective client) only on specific request of such client;
b) Such past performance data shall be communicated to clients (including
prospective clients) on a one-to-one basis and such past performance data
shall not be made available to general public through public media/website of
IA or any other mode.
c) IAs who wish to communicate certified past performance data to clients
(including prospective clients) must enroll with PaRRVA within three months of
36 Reference: Circular No. HO/38/12/11(1)2025-MIRSD-POD/ I/73/2025 dated October 30, 2025
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its operationalization, else such IAs will not be able to communicate certified
past performance data to clients post three months from the date of
operationalization of PaRRVA.
d) The applicable period for such past performance data shall be prior to the
date of operationalization of PaRRVA. Accordingly, the performance for the
period subsequent to the date of operationalisation of PaRRVA shall only be
advertised or provided to client using risk and return metrics verified by
PaRRVA.
e) Any communication of such past performance data shall be accompanied
with the following disclaimer:
“The performance data presented herein are not verified by Past Risk and
Return Verification Agency (PaRRVA) or any other agency recognized by
SEBI for this purpose. The performance data presented herein may not be
comparable to performance data of any other IA. Computation of the
performance may vary across the industry. Users are requested to apply
their due diligence before making investment decisions on the basis of the
given past performance data. Past performance is no guarantee of future
results. Investment in securities is subject to market risk. Registration with
SEBI or enlistment with IAASB is not a guarantee or assurance of future
returns. ”
f) After two years from the date of operationalisation of PaRRVA, IAs will be
permitted to communicate/display only PaRRVA verified risk and return metrics
and will not be permitted to use past performance data related to the period
prior to the date of operationalisation of PaRRVA, in any communication to
clients (including prospective clients).
(ii) IAASB shall specify the templates in which the certified past performance data
shall be communicated in consultation with Industry Standard Forums for IAs and
SEBI.
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(iii) Any contravention of the provisions of paragraph 24(i) and 24(ii) will make an
entity liable for enforcement actions, including summary proceedings “under
Regulation 30A.(1)( c) of SEBI(Intermediaries) Regulations, 2008 which states that
a person found to have made claim(s) of return or performance in respect of or
related to a security or securities, unless otherwise permitted by the Board to make
such claim(s) shall be liable for summary proceedings.
26. Service platform for investors to trace inactive and unclaimed Mutual Fund
folios-MITRA (Mutual Fund Investment Tracing and Retrieval Assistant)
IAs are advised to refer to circular no. SEBI/HO/IMD/IMD-SEC-3/P/CIR/2025/15
dated February 12, 2025 on ‘Service platform for investors to trace inactive and
unclaimed Mutual Fund folios-MITRA (Mutual Fund Investment Tracing and
Retrieval Assistant)’ available at: https://www.sebi.gov.in/legal/circulars/feb-
2025/service-platform-for-investors-to-trace-inactive-and-unclaimed-mutual-fund-
folios-mitra-mutual-fund-investment-tracing-and-retrieval-assistant-_91847.html
27. Cybersecurity and Cyber Resilience Framework (CSCRF)
IAs are advised to refer to the following circulars with respect to Cybersecurity and
Cyber Resilience Framework (CSCRF):
i. Circular No. SEBI/HO/ITD-1/ITD_CSC_EXT/P/CIR/2024/113 dated August
20, 2024 on ‘Cybersecurity and Cyber Resilience Framework (CSCRF) for
SEBI Regulated Entities(REs)’ available at:
https://www.sebi.gov.in/legal/circulars/aug-2024/cybersecurity-and-cyber-
resilience-framework-cscrf-for-sebi-regulated-entities-res-_85964.html
ii. Circular No. SEBI/HO/ITD-1/ITD_CSC_EXT/P/CIR/2024/184 dated
December 31, 2024 on ‘Clarifications to Cybersecurity and Cyber Resilience
Framework (CSCRF)for SEBI Regulated Entities (REs)’ available at:
https://www.sebi.gov.in/legal/circulars/dec-2024/clarifications-to-
cybersecurity-and-cyber-resilience-framework-cscrf-for-sebi-regulated-
entities-res-_90401.html
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iii. Circular No. SEBI/HO/ITD-1/ITD_CSC_EXT/P/CIR/2025/45 dated March 28,
2025 on ‘Extension towards Adoption and Implementation of Cybersecurity
and Cyber Resilience Framework (CSCRF) for SEBI Regulated Entities
(REs)’ available at: https://www.sebi.gov.in/legal/circulars/mar-
2025/extension-towards-adoption-and-implementation-of-cybersecurity-and-
cyber-resilience-framework-cscrf-for-sebi-regulated-entities-res-_93146.html
iv. Circular No. SEBI/HO/ITD-1/ITD_CSC_EXT/P/CIR/2025/60 dated April 30,
2025 on ‘Clarifications to Cybersecurity and Cyber Resilience Framework
(CSCRF) for SEBI Regulated Entities (REs)’ available at:
https://www.sebi.gov.in/legal/circulars/apr-2025/clarifications-to-
cybersecurity-and-cyber-resilience-framework-cscrf-for-sebi-regulated-
entities-res-_93734.html
v. Circular No. SEBI/HO/ITD-1/ITD_CSC_EXT/P/CIR/2025/96 dated June 30,
2025 on ‘Extension towards Adoption and Implementation of Cybersecurity
and Cyber Resilience Framework (CSCRF) for SEBI Regulated Entities
(REs)’ available at:
https://www.sebi.gov.in/web/?file=https://www.sebi.gov.in/sebi_data/attachdo
cs/jun-2025/1751286353420.pdf#page=1&zoom=page-width,-15,765
vi. Circular No. SEBI/HO/ITD-1/ITD_CSC_EXT/P/CIR/2025/119 dated August
28, 2025 on ‘Technical Clarifications to Cybersecurity and Cyber Resilience
Framework (CSCRF) for SEBI Regulated Entities (REs)’ available at:
https://www.sebi.gov.in/web/?file=https://www.sebi.gov.in/sebi_data/attachdo
cs/aug-2025/1756380695925.pdf#page=1&zoom=page-width,-15,842
28. Adoption of Standardised, Validated and Exclusive UPI IDs for Payment
Collection by SEBI Registered Intermediaries from Investors
IAs are advised to refer to circular no. SEBI/HO/DEPA-II/DEPA-
II_SRG/P/CIR/2025/86 dated June 11, 2025 on ‘Adoption of Standardised,
Validated and Exclusive UPI IDs for Payment Collection by SEBI Registered
Intermediaries from Investors’ available at:
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https://www.sebi.gov.in/legal/circulars/jun-2025/adoption-of-standardised-
validated-and-exclusive-upi-ids-for-payment-collection-by-sebi-registered-
intermediaries-from-investors_94535.html
29. Rights of Persons with Disabilities Act, 2016 and rules made thereunder-
mandatory compliance by all Regulated Entities
IAs are advised to refer to the following circulars:
i. Circular no. SEBI/HO/ITD-1/ITD_VIAP/P/CIR/2025/111 dated July 31, 2025
on ‘Rights of Persons with Disabilities Act, 2016 and rules made thereunder-
mandatory compliance by all Regulated Entities’ available at:
https://www.sebi.gov.in/web/?file=https://www.sebi.gov.in/sebi_data/attachdo
cs/aug-2025/1754651443956.pdf#page=1&zoom=page-width,-15,842
ii. Circular no. SEBI/HO/ITD-1/ITD_VIAP/P/CIR/2025/121 dated August 29,
2025 on ‘Extension of timelines and Update of reporting authority for IAs and
RAs w.r.t. SEBI Circular for Compliance to Digital Accessibility Circular ‘Rights
of Persons with Disabilities Act, 2016 and rules made thereunder- mandatory
compliance by all Regulated Entities’ dated July 31, 2025 (Circular No.
SEBI/HO/ITD-1/ITD_VIAP/P/CIR/2025/111)’ available at:
https://www.sebi.gov.in/web/?file=https://www.sebi.gov.in/sebi_data/attachdo
cs/aug-2025/1756462899734.pdf#page=1&zoom=page-width,-15,842
iii. Circular no. SEBI/HO/ITD-1/ITD_VIAP/P/CIR/2025/131 dated September 25,
2025 on ‘Compliance Guidelines for Digital Accessibility Circular ‘Rights of
Persons with Disabilities Act, 2016 and rules made thereunder-
mandatory compliance by all Regulated Entities’ dated July 31, 2025
(Circular No. SEBI/HO/ITD-1/ITD_VIAP/P/CIR/2025/111)’ available at:
https://www.sebi.gov.in/web/?file=https://www.sebi.gov.in/sebi_data/attachdo
cs/sep-2025/1758794128066.pdf#page=1&zoom=page-width,-15,773
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iv. Circular no. HO/13/19/13(2)2025-ITD-1_VIAP/I/187/2025 dated December 8,
2025 on ‘Clarification on the Digital Accessibility circulars of SEBI’ available
at:
https://www.sebi.gov.in/web/?file=https://www.sebi.gov.in/sebi_data/attachdo
cs/dec-2025/1765194149704.pdf#page=1&zoom=page-width,-15,842
VII. REPORTING REQUIREMENTS
30. Periodic reporting format for Investment Advisers37
30.1. In terms of Regulation 15(12) of Securities and Exchange Board of India
(Investment Advisers) Regulations, 2013 (“IA Regulations”), investment
advisers are required to furnish to SEBI, information and reports as may be
specified by SEBI from time to time.
30.2. The periodic reporting format for IAs shall be as specified by IAASB in
consultation with SEBI, from time to time. Such changes shall be notified to
IAs through circulars/notices.
30.3. For any changes in regulatory provisions in future, IAASB shall make
appropriate consequential amendments to the reporting format and notify the
same to IAs, through circulars/notices.
IAASB shall make necessary arrangements for obtaining periodic reports
from IAs in the specified format
30.4. IAs shall submit periodic report for half-yearly periods ending on September
30 and March 31 of every financial year, within 30 days38 from the end of
the respective half-yearly period for which details are to be furnished.39
31. Other reporting requirements
37 Reference: Circular SEBI/HO/MIRSD/MIRSD-POD-2/P/CIR/2024/38 dated May 07,
2024
38 Reference: Circular No. SEBI/HO/MIRSD/MIRSD-PoD1/P/CIR/2024/147 dated
October 25, 2024
39 Note: Timeline for submission of periodic report for half-yearly period ending March
31, 2025 has been extended till July 31, 2025.
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31.1. Undertaking on compliance of the advisory for Financial Sector
Organizations regarding Software as a Service (SaaS) based solutions
to be submitted half yearly
The compliance of the advisory shall be reported by IA to SEBI with an
undertaking, “Compliance of the SEBI circular for Advisory for Financial
Sector Organizations regarding Software as a Service (SaaS) based
solutions has been made.”
31.2. To conduct annual audit and submit a report and adverse findings, if
any
In terms of regulation 19(3) of the IA Regulations, IA is required to conduct
annual audit in respect of compliance with the IA regulations and circulars
issued thereunder from a member of Institute of Chartered Accountants of
India or Institute of Company Secretaries of India within six months from the
end of each financial year. Submit a report of the same and adverse findings
of the audit, if any, along with action taken thereof duly approved by the
individual IA/management of the non-individual IA within a period of one
month from the date of the audit report but not later than October 31st of
each year for the previous financial year.
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VIII. ANNEXURES
ANNEXURE A
TERMS AND CONDITIONS OF AGREEMENT BETWEEN IA AND THE CLIENT
Investment Adviser shall ensure that the following terms and conditions are
incorporated in the Investment Advisory Agreement:
1. Appointment of the Investment Adviser: In accordance with the applicable laws,
client hereby appoints, entirely at his / her / its risk, the Investment Adviser to
provide the required services in accordance with the terms and conditions of the
agreement as mandated under Regulation19(1)(d) of the Securities and
Exchange Board of India (Investment Advisers) Regulations, 2013.
2. The agreement shall clearly provide for in the first page:
a) the consent of the client on the following understanding:
 “I / We have read and understood the terms and conditions of
Investment Advisory services provided by the Investment Adviser along
with the fee structure and mechanism for charging and payment of fee.
 Based on our written request to the Investment Adviser, an opportunity
was provided by the Investment Adviser to ask questions and interact
with ‘person(s) associated with the investment advice’”.
b) Declaration from the Investment Adviser that:
 Investment Adviser shall neither render any investment advice nor
charge any fee until the client has signed this agreement.
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 Investment Adviser shall not manage funds and securities on behalf of
the client and that it shall only receive such sums of monies from the
client as are necessary to discharge the client’s liability towards fees
owed to the Investment Adviser.
 Investment Adviser shall not, in the course of performing its services to
the client, hold out any investment advice implying any assured returns
or minimum returns or target return or percentage accuracy or service
provision till achievement of target returns or any other nomenclature
that gives the impression to the client that the investment advice is risk-
free and/or not susceptible to market risks and or that it can generate
returns with any level of assurance.
c) Fees specified under Investment Adviser Regulations and relevant
circulars issued thereunder. (to be specifically mentioned here)
d) Fees charged to the client. (to be specifically mentioned here)
3. Scope of services: The services to be provided by the Investment Adviser to be
described in detail. However, the same shall be subject to the activities
permitted under the Securities and Exchange Board of India (Investment
Advisers) Regulations, 2013. The Investment Adviser shall act in a fiduciary
capacity towards its clients at all times.
4. Functions of the Investment Adviser: Functions, obligations, duties and
responsibilities of the Investment Adviser (including principal officer and all
persons associated with the investment advice), with specific provisions
covering, inter alia,:
a) Terms of compliance with the Securities and Exchange Board of India
(Investment Advisers) Regulations, 2013 and its amendments, rules,
circulars and notifications.
b) Compliance with the eligibility criteria as specified under the Investment
Adviser Regulations at all times.
c) Risk assessment procedure of client including their risk capacity and risk
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aversion.
d) Providing reports to clients on potential and current investments.
e) Maintenance of records i.e. client-wise KYC, risk assessment, analysis
reports of investment advice and suitability, terms and conditions document,
related books of accounts and a register containing list of clients along with
dated investment advice and its rationale in compliance with the Securities
and Exchange Board of India (Investment Advisers) Regulations, 2013.
f) Provisions regarding audit as per the Securities and Exchange Board of
India (Investment Advisers) Regulations, 2013.
g) Undertaking to abide by the Code of Conduct as specified in the Third
Schedule of the Securities and Exchange Board of India (Investment
Advisers) Regulations, 2013.
5. Investment objective and guidelines:
a) Types of securities in which investment advice would be provided, including
an undertaking from the investment adviser to recommend direct
implementation of advice i.e. through direct schemes/direct codes, and
other client specifications / restrictions on investments, if any.
b) Particulars regarding financial plan or model or strategy as agreed with the
client (based on the risk profiling conducted for the client, total AUA of the
client and time period for deployment).
c) Tax related aspects pertaining to investment advice and as applicable on
the investment adviser’s fee.
6. Risk Factors: A detailed statement of risks associated with each type of
investment covering the standard risks associated with each type of investment
in securities and investment products.
7. Validity of advisory services: Minimum period if any, and provision for renewal,
if any, along with terms and conditions for such renewal.
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8. Amendments – The agreement may be amended by mutual written consent of
the parties.
9. Termination – This Agreement may be terminated under the following
circumstances, namely-
a) Voluntary/ mandatory termination by the Investment Adviser.
b) Voluntary/ mandatory termination by the client.
c) Suspension/ Cancellation of registration of Investment Adviser by SEBI.
d) Any other action taken by other regulatory body/ Government authority.
In case of a voluntary termination of the agreement, the client would be required
to give a 30 days prior written notice while the Investment Adviser would be
required to give a 30 days prior written notice.
In case of suspension of the certificate of registration of the IA, the client may
be provided with the option to terminate the agreement.
10. Implications of Amendments and termination: The implications of Amendment,
Termination and assignment, such as set off of fees received by the Investment
Adviser, refund of fees, completion/termination of investment-in-progress,
transition support obligations of the Investment Adviser, etc. shall also be
provided in detail.
11. Relationship with related parties: The Investment Adviser to clearly declare that
it is carrying on its activities independently, at an arms-length basis with its
related parties. Disclosures of conflicts to be made.
12. Investment Adviser engaged in other activities:
i. The Investment Adviser (individual) to represent to the client that it
maintains an arms-length relationship between its activities as an
investment adviser and other activities and to covenant that this arm’s
length relationship shall be maintained throughout the tenure of advisory
service;
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ii. In case of Investment Adviser who are individuals:
(a) to represent that they shall not provide any distribution services.
(b) to represent that the family of an individual Investment Adviser shall not
provide distribution services to the client advised by the individual
Investment Adviser, for securities and investment products.
(c) to represent that they shall not provide investment advisory services,
for securities and investment products, to a client who is receiving
distribution services from other family members;
iii. The Investment Adviser (non-individual);
(a) to represent that they shall not provide any distribution services, for
securities and investment products, either directly or through their group
to an advisory client.
(b) to represent that they shall not provide investment advisory services,
for securities and investment products, either directly or through their
group to the distribution client.
13. Representation to client: The investment adviser to ensure that it will take all
consents and permissions from the client prior to undertaking any actions in
relation to the securities or investment product advised by the investment
adviser.
14. No right to seek Power of Attorney: The Investment Adviser to clearly declare
that it shall not seek any power of attorney or authorizations from its clients for
implementation of investment advice.
15. No conflict of interest: The Investment Adviser to clearly declare that it will
disclose all conflicts of interest as and when they arise and not derive any direct
or indirect benefit out of the client’s securities/investment products.
16. Maintenance of accounts and confidentiality: Investment Adviser shall be
responsible for maintenance of client accounts and data as mandated under the
Securities and Exchange Board of India (Investment Advisers) Regulations,
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2013.
17. Terms of fees and billing:
(a) Provide specific details on the following:
i. The quantum and manner of payment of fees for investment advice
rendered.
ii. Fee modalities and periodicity, by attaching a detailed fee schedule to
the agreement;
iii. Illustration(s) on how the fee will be determined;
iv. whether payment to be made in advance;
v. type of documents evidencing receipt of payment of fee;
vi. Periodicity of billing with clear date and service period
(b) The payment of fees shall be through a mode which shows traceability of
funds. Such modes may include account payee crossed cheque/ Demand
Drafts or by way of direct credit to the bank accounts through NEFT/ RTGS/
IMPS/ UPI or any other mode specified by SEBI from time to time. However,
the fees shall not be accepted in cash.
18. Liability of Investment Adviser: The agreement to clearly state that the
Investment Adviser shall not incur any liability by reason of any loss, which a
client may suffer by reason of any depletion in the value of the assets under
advice, which may result by reason of fluctuation in asset value, or by reason of
non-performance or underperformance of the securities/funds or any other
market conditions.
19. Representations and covenants: Adequate and appropriate representations
about qualifications of the adviser, principal officer, persons associated with the
investment advice, receipt of all applicable approvals and consents (from
regulatory / statutory bodies, third party consents, corporate approvals etc.) and
covenant to maintain them throughout the validity of advisory service.
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20. Death or Disability of client: Provisions in relation to continuation / termination
of the advisory service in event of client's death / disability, succession,
nomination, representation etc. to be incorporated.
21. Death or Disability of investment adviser: Every individual investment adviser
must appoint one of its legal heirs, executor, trustee, administrator of estate of
the deceased (the “Obligor”) as the person-in-charge in the event of investment
adviser’s death / disability. The agreement must set out the full name, PAN and
contact details of such Obligor. The agreement must disclose the steps to be
taken by the Obligor in the event of the above eventuality in order to ensure
protection of interest of the clients and redressal of clients’ claims, including but
not limited to (a) giving notice to all clients of the occurrence of the eventuality
and confirmation of having taken charge over by the Obligor (b) settlement of
account with the client (fees payable and/or fees refundable), (c) completion of
transition of any outstanding business to another duly registered investment
adviser, (d) redressal of any outstanding or new disputes / claims of clients.
22. Settlement of disputes and provision for arbitration: Adequate provisions to
cover protection of acts done in good faith as well as for dispute resolution
mechanism including arbitration that may be specified under the Securities and
Exchange Board of India (Investment Advisers) Regulations, 2013.
23. Adherence to grievance redressal timelines: Investment Adviser shall be
responsible to resolve the grievances within the timelines specified under SEBI
circulars.
24. Severability: If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
25. Force Majeure: The Investment Adviser shall not be liable for delays or errors
occurring by reason of circumstances beyond its control, including but not
limited to acts of civil or military authority, national emergencies, work
stoppages, fire, flood, catastrophe, acts of God, insurrection, war, riot, or failure
of communication or power supply. In the event of equipment breakdowns
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beyond its control, the Advisor shall take reasonable steps to minimize service
interruptions but shall have no liability with respect thereto.
26. Miscellaneous: Each party agrees to perform such further actions and execute
such further agreements as are necessary to effectuate the purposes hereof.
ANNEXURE B
Most Important Terms and Conditions (MITC) for Investment Advisers40
[Forming part of the Investment Advisory Agreement]
1. The Investment Adviser (IA) 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.
2. 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.
3. 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.
4. Investment advice, only related to securities shall fall under the purview of
SEBI. 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 and the services of IA in respect of such products/services
do not come under regulatory purview of SEBI and that no recourse is available
to the client with SEBI for grievances related to such products/services or
services of IA in respect of such products/services.
5. This agreement is for the investment advisory services provided by the IA and
IA cannot execute/carry out any trade (purchase/sell transaction) on behalf of
the client without his/her/its specific and positive consent on every trade. Thus,
the client is advised not to permit IA to execute any trade on his/her/its behalf
without explicit consent.
6. The fee charged by IA to the client will be subject to the maximum of amount
prescribed by SEBI/Investment Adviser Administration and Supervisory Body
(IAASB) from time to time (applicable only for Individual and HUF Clients).
40 Reference: Circular No. SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/19 dated February 17, 2025
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Note:
(i) The current fee limit under Fixed Fee mode is Rs 1,51,000/- per annum per
family of client. Under Assets under Advice (AUA) mode, maximum fee limit
is 2.5 per cent of AUA per annum per family of client.
(ii) The IA may change the fee mode at any time with the client’s consent;
however, the maximum fee limit in such cases shall be higher of fee limit
under the fixed fee mode or 2.5 per cent of AUA per annum per family of
client.
(iii) The fee limits do not include statutory charges.
(iv) The fee limits apply only for investment advice related to securities under
purview of SEBI.
(v) The fee limits do not apply to a non-individual client / accredited investor.
7. IA may charge fees in advance if agreed by the client. Such advance shall not
exceed the period stipulated by SEBI; presently it is maximum one year. In
case of premature termination of the IA services by the client or the IA, the
client shall be entitled to seek refund of proportionate fees only for unexpired
period. However, IA is entitled to retain a maximum breakage fee of not greater
than one-quarter fee.
8. 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. Optionally
the client can make payments through Centralized Fee Collection Mechanism
(CeFCoM), managed by BSE Limited (i.e. currently recognized IAASB).
9. The IA is expected to know the client’s financial details for providing services.
Hence, the client is required to share the financial information (e.g. income,
existing investments, liabilities, etc.) with the IA.
10. The IA is required to carry out the client’s risk profiling and suitability analysis
before providing services and thereafter on an ongoing basis. The services
provided will be in line with the assessed risk profile. IA shall also communicate
the assessed risk profile to the client.
11. As part of conflict of interest management, the client or the client’s family
members will not be provided any distribution services by IA or any of its group
entity/ family members. IA shall, wherever available, advice direct plans (non-
commission based) of products only.
The IA shall endeavor to promptly inform the client of any conflict of interest
that may affect the services being rendered to the client.
12. For any grievances,
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Step 1: The client should first contact the IA using the details on its website or
following contact details:
(IA to Provide details as per ‘Grievance Redressal / Escalation Matrix’)
Step 2 : If the resolution provided by IA is unsatisfactory, the client can lodge
grievances through SEBI’s SCORES platform at www.scores.sebi.gov.in
Step 3: If the client remains dissatisfied with the outcome of the SCORES
complaint, the client may consider the Online Dispute Resolution (ODR)
through the Smart ODR portal at https://smartodr.in
13. The SEBI registration, enlistment with IAASB, and NISM certification do not
guarantee the performance of IA or assure returns to the client.
14. Clients are required to keep contact details, including email id and mobile
number/s updated with the IA at all times.
15. The IA shall never ask for the client’s login credentials and OTPs for the
client’s Trading Account, Demat Account and Bank Account. Never share such
information with anyone including IA.
Note: For existing clients as on February 17, 2025, the MITC shall be informed by
the IAs to the clients via email or any other suitable mode of communication (which
can be preserved) by June 30, 2025.
ANNEXURE C
COMPLAINT DATA TO BE DISPLAYED BY IAs
Formats for investors complaints data to be disclosed monthly by IAs on their
website/mobile application:
Data for the month ending -_____________
Sr. Received Pendin Receive Resolve Total Pending Average
No from g at the d d * Pendin complaint Resolutio
. end of g # s > n time^ (in
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last 3months days)
month
1 Directly
from
Investors
2 SEBI
(SCORE
S )
3 Other
Sources
(if any)
Grand
Total
Number of complaints received during month against the IA due to impersonation
by some other entity:
Note: In case of any complaints received against the IA due to impersonation of
the IA by some other entity, the IA may adjust the number of such complaints from
total number of received/resolved complaints while preparing the above table.
Further, IA must close such impersonation related complaints after following the
due process as specified by SEBI/ IAASB.
* Inclusive of complaints of previous months resolved in the current month.
# Inclusive of complaints pending as on the last day of the month
^ Average Resolution time is the sum total of time taken to resolve each complaint
in days, in the current month divided by total number of complaints resolved in the
current month.
Trend of monthly disposal of complaints
Sr. Month Carried forward Received Resolved* Pending#
No. from previous
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month
1 April, YYYY
2 May, YYYY
3 June, YYYY
4 ……………..
5 March,
YYYY
Grand Total
* Inclusive of complaints of previous months resolved in the current month.
# Inclusive of complaints pending as on the last day of the month
Trend of annual disposal of complaints
Sr. Year Carried forward Received Resolved* Pending#
No. from previous
year
1 2021-22
2 2022-23
3 2023-24
4 20XX-XX
Grand Total
* Inclusive of complaints of previous months resolved in the current month.
# Inclusive of complaints pending as on the last day of the month
Annexure D
Detailed framework for RAASB and IAASB
1. Criteria for grant of recognition as RAASB and IAASB:
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1.1. The recognition of a recognised stock exchange as RAASB and IAASB
under regulation 14 of RA Regulations and IA Regulations respectively shall
be based on the following eligibility criteria:
(i) Minimum number of years of existence as recognised stock exchange:
15 years;
(ii) Minimum net worth of recognised stock exchange: INR 200 crores;
(iii) Stock exchange having nation-wide terminals;
(iv) Investor grievance redressal mechanism including Online Dispute
Resolution Mechanism;
(v) Capacity for investor service management gauged through reach
of Investor Service Centers (ISCs): Stock exchange having ISCs in at
least 20 cities.
2. Setting up of requisite systems by stock exchange recognised as RAASB/
IAASB:
2.1. The stock exchange recognised as RAASB/IAASB shall include in its
Memorandum of Association, Articles of Association and bye-laws, requisite
provisions to fulfil the role and responsibilities specified in para 3 below.
2.2. The stock exchange recognised as RAASB/IAASB shall maintain necessary
infrastructure like adequate office space, equipment and manpower to
effectively discharge the responsibilities of RAASB/ IAASB. Infrastructure
may be shared with other group entities where required.
2.3. The stock exchange recognised as RAASB/IAASB shall put in place
systems/ processes for maintaining database of RAs/IAs, sharing of
information with SEBI and discharging the responsibilities of RAASB/
IAASB.
2.4. RAASB and IAASB shall constitute an internal committee to oversee the
activities of administration and supervision of RAs and IAs. The committee
shall periodically review the performance of the stock exchange as RAASB/
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IAASB and make recommendations to SEBI. The constitution of the
committee shall be as follows:
(i) Public Interest Directors shall form the majority of the committee;
(ii) A maximum of two key management personnel of the stock exchange
can be on the committee;
(iii) The committee shall also include independent external persons
representing RAs, IAs and proxy advisors, with minimum one
representative for each segment.
3. Responsibilities of SEBI and RAASB/ IAASB:
3.1. The core functions relating to registration, enforcement action and
disciplinary or penal action shall remain with SEBI and SEBI shall continue
to register IAs and RAs as per the mandate given under the Securities and
Exchange Board of India Act, 1992. The following functions as specified in
the table below shall be performed concurrently by SEBI and RAASB or
IAASB, as the case may be.
SEBI Proposed RAASB/IAASB
1. Approval of Activities pertaining to administration:
registration
1. Initial scrutiny of registration applications for
applications of
ensuring completeness of submission of
RAs/IAs – fresh
information/ documents along with
registration as well
recommendation on the applications to SEBI
as application made
pursuant to change 2. Initial scrutiny of post-registration applications
in control illustrated below for ensuring completeness of
2. Approval for post- submission of information/ documents along
registration with recommendation on the applications to
applications such as SEBI:
–
a. Change of name
a. Change of name
b. Change of address
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b. Change of c. Change of compliance officer/ principal
address officer/ director/ associated person, contact
c. Change of details, etc.
compliance
d. Change in shareholding
officer/ principal
officer/ director/ e. Merger/amalgamation/takeover/change in
associated control of RA/IA
person, contact
f. Surrender of registration
details, etc.
d. Change in g. NOC for establishing wholly owned
shareholding subsidiary/ joint venture in foreign
e. Merger/ jurisdiction, etc.
amalgamation/
3. Approval of advertisements of RAs/IAs as per
takeover/ change
Advertisement Code issued by SEBI
in control of RA/IA
f. Surrender of 4. Maintenance of database of RAs/IAs
registration
5. Enlisting RAs/IAs in the proposed
g. NOC for
RAASB/IAASB
establishing wholly
owned subsidiary/ 6. Issuance of circulars/instructions/standard
joint venture in operating procedures, etc. to RAs/IAs for
foreign jurisdiction, implementation of provisions of SEBI
etc. regulations/ circulars
3. Supervision of
7. Submission of periodical reports to SEBI
RAs/IAs
8. Collection and administration of fees.
4. Taking enforcement
action suo moto or
Activities pertaining to supervision:
otherwise
9. Monitoring the activities of RAs/IAs by
5. Taking disciplinary/
obtaining Annual Compliance Audit Report
penal action
and other periodic/ad-hoc reports covering
including levying
penalty on
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recommendation of general details of RAs/IAs, details of customer
proposed body complaints, details of clients, etc.
6. Grievance redressal
10. Monitoring compliance of regulations/
circulars by Ras/IAs
11. Grievance redressal and Arbitration/ Online
Dispute Resolution (ODR)
12. Taking administrative action including
imposition of penalties and issuing
warning/caution letter
13. Referring to SEBI for enforcement action
against RAs/IAs.
In addition to the above, the recognised
RAASB/IAASB may be assigned with on-
site/offsite inspection of RAs/IAs, to be done on
behalf of/concurrently with SEBI and any other
activity as may be specified by SEBI.
4. Enlistment of RAs/IAs with RAASB/IAASB:
4.1. Amendments have been made to RA/IA Regulations to provide for
‘enlistment’ of RAs/IAs with RAASB/IAASB in place of the earlier provision
of ‘membership’ of RAs/IAs with RAASB/IAASB. Under the amended
regulations, an applicant seeking registration as RA./IA shall be required to
‘enlist’ with RAASB/IAASB.
4.2. Further, in order to provide ease of doing business and to ensure smooth
operationalization of RAASB and IAASB framework and to prevent
disruption for existing RAs and IAs registered with SEBI, the following has
been provided for:
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(i) Existing RAs registered with SEBI shall be deemed to be enlisted with
RAASB. Existing IAs registered with SEBI who are also members of
BASL41 shall be deemed to be enlisted with the IAASB recognised
under this framework.
(ii) Applications for registration as RA received and under process with
SEBI up to the effective date of operationalization of RAASB framework
shall continue to be processed by SEBI. Such RAs shall be deemed to
be enlisted with RAASB once registration is granted by SEBI.
(iii) Applications for registration as IA pending with SEBI/BASL at the time
of operationalization of IAASB framework shall continue to be
processed by SEBI/BASL. Once registration is granted by SEBI, such
IAs shall be deemed to be enlisted with the IAASB recognised under
this framework.
(iv) New applications received from the effective date of operationalization
of RAASB/IAASB framework shall be routed through RAASB/IAASB. In
such cases, enlistment with RAASB/ IAASB shall be a pre-requisite for
grant of certificate of registration as RA/ IA by SEBI.
(v) With reference to the RAs/IAs/applicants referred in point (i) to (iii)
above, it is clarified that no additional documentation shall be required
to be submitted by such RAs/IAs/applicants for enlistment with RAASB
or IAASB as the case may be.
5. Repeal and Savings with respect to erstwhile IAASB framework
5.1 Any action taken or purported to have been taken or any action that may be
taken against any person in relation to the membership of IAASB recognised
under regulation 14 of IA Regulations shall be deemed to have been done
or taken or may be taken under the corresponding provisions of the
amended IA regulations.
41 BASL- BSE Administration and Supervision Limited (“BASL”) which was recognized as IAASB at
that point of time
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6. Measures for promoting efficiency
6.1 To begin with, in order to ensure efficiency in the system and economies of
scale, RAASB and IAASB shall be one and the same stock exchange.
6.2 In cases where a person has registration as both RA as well as IA, in the
interest of efficiency, a single window clearance of various approvals shall
be adopted. Details in this regard shall be specified by the recognised
RAASB and IAASB.
7. Submission of Periodic Reports
7.1 Pursuant to operationalization of RAASB/ IAASB framework, all registered
RAs/ IAs shall submit periodic reports to RAASB/ IAASB in the manner
specified by SEBI.
8. Monitoring of RAASB/IAASB
8.1 SEBI shall monitor RAASB and IAASB through periodical reports and
inspection regarding administration and supervision of RAs and IAs.
ANNEXURE E
ADVISORY FOR FINANCIAL SECTOR ORGANIZATIONS SOFTWARE AS A
SERVICE (SaaS) BASED SOLUTION
TLP:AMBER
CERT-Fin Advisory- 201155100308
Advisory for Financial Sector Organisations- RBI and SEBI
Overview
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It has been learnt that some of the financial sector institutions are availing or
thinking of availing Software as a Service (SaaS) based solution for managing their
Governance, Risk & compliance (GRC) functions so as to improve their cyber
security posture. Many a time the risk & compliance data of the institution moves
cross border beyond the legal and jurisdictional boundary of India due to the nature
of shared cloud SaaS. While SaaS may provide ease of doing business and quick
turnaround, it also brings significant risk to the overall health of India's financial
sector with respect to data safety and security.
Description
If the following data sets fall in the hands of an adversary/cyber attacker, it may lead
to unprecedented increase in the attack surface area and weakening of Indian
financial sector infrastructure's overall resilience.
• Credit Risk Data
• liquidity Risk Data
• Market Risk Data
• System & Sub-System Information
• Internal & Partner IP Schema
• Network Topography & Design
• Audit/Internal Audit Data
• System Configuration Data
• System Vulnerability Information
• Risk Exception Information
• Supplier Information & it's dependencies related Data
Solution
The Financial Sector organisations may be advised to protect such critical data
using layered defence approach and seamless protection against external or insider
threat. The organisations may also be advised to ensure complete protection &
seamless control over their critical system by continuous monitoring through direct
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control and supervision protocol mechanisms while keeping such critical data within
the legal boundary of India.
The organisations may also be requested to report back to their respective
regulatory authority regarding compliance to this advisory.
It is requested that you may kindly keep CERT-In informed of the actions taken and
periodically provide the updated compliance to this advisory.
(It may be noted that TLP Amber means: limited disclosure, restricted to
participants' organizations.
When should be used: Sources may use TLP:AMBER when information requires
support to be effectively acted upon, yet carries risks to privacy, reputation, or
operations if shared outside of the organizations involved.
How may it be shared: Recipients may only share TLP:AMBER information with
members of their own organization, and with clients or customers who need to know
the information to protect themselves or prevent further harm. Sources are at liberty
to specify additional intended limits of the sharing: these must be adhered to.)
ANNEXURE F
INVESTOR CHARTER IN RESPECT OF IAs
A. Vision and Mission Statements for investors
 Vision
Invest with knowledge & safety.
 Mission
Every investor should be able to invest in right investment products based
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on their needs, manage and monitor them to meet their goals, access
reports and enjoy financial wellness.
B. Details of business transacted by the Investment Adviser with respect to
the investors
 To enter into an agreement with the client providing all details including fee
details, aspects of Conflict of interest disclosure and maintaining
confidentiality of information.
 To do a proper and unbiased risk – profiling and suitability assessment of
the client.
 To conduct audit annually.
 To disclose the status of complaints on its website.
 To disclose the name, proprietor name, type of registration, registration
number, validity, complete address with telephone numbers and associated
SEBI Office details (i.e. Head office/ regional/ local Office) on its website.
 To employ only qualified and certified employees.
 To deal with clients only from official number
 To maintain records of interactions, with all clients including prospective
clients (prior to onboarding), where any conversation related to advice has
taken place.
 To ensure that all advertisements are in adherence to the provisions of the
Advertisement Code for Investment Advisers
 Not to discriminate in terms of services provided, among clients opting for
same/similar products/services offered by investment adviser.
C. Details of services provided to investors (No Indicative Timelines)
 Onboarding of Clients
o Sharing of agreement copy
o Completing KYC of clients
 Disclosure to Clients
o To provide full disclosure about its business, affiliations, compensation
in the agreement.
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o To not access client’s accounts or holdings for offering advice.
o To disclose the risk profile to the client.
o To disclose any conflict of interest of the investment advisory activities
with any other activities of the investment adviser.
o To disclose the extent of use of Artificial Intelligence tools in providing
investment advisory services.
 To provide investment advice to the client based on the risk-profiling of the
clients and suitability of the client.
 To treat all advisory clients with honesty and integrity.
 To make adequate disclosure to the investor of all material facts such as
risks, obligations, costs, etc. relating to the products or securities advised
by the adviser.
 To provide clear guidance and adequate caution notice to clients when
providing investment advice for dealing in complex and high-risk financial
products/services.
 To ensure confidentiality of information shared by clients unless such
information is required to be provided in furtherance of discharging legal
obligations or a client has provided specific consent to share such
information.
 To disclose the timelines for the various services provided by the investment
adviser to clients and ensure adherence to the said timelines.
D. Details of grievance redressal mechanism and how to access it
1. Investor can lodge complaint/grievance against Investment Adviser in the
following ways:
Mode of filing the complaint with investment adviser
In case of any grievance / complaint, an investor may approach the
concerned Investment Adviser who shall strive to redress the grievance
immediately, but not later than 21 days of the receipt of the grievance.
Mode of filing the complaint on SCORES or with Investment Adviser
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Administration and Supervisory Body (IAASB)
i. SCORES 2.0 (a web based centralized grievance redressal system
of SEBI for facilitating effective grievance redressal in time-bound
manner) (https://scores.sebi.gov.in)
Two level review for complaint/grievance against investment adviser:
 First review done by designated body (IAASB)
 Second review done by SEBI
ii. Email to designated email ID of IAASB
2. If the Investor is not satisfied with the resolution provided by the Market
Participants, then the Investor has the option to file the complaint/ grievance
on SMARTODR platform for its resolution through online conciliation or
arbitration.
3. With regard to physical complaints, investors may send their complaints to:
Office of Investor Assistance and Education,
Securities and Exchange Board of India,
SEBI Bhavan, Plot No. C4-A, ‘G’ Block,
Bandra-Kurla Complex, Bandra (E),
Mumbai - 400 051
E. Rights of investors
 Right to Privacy and Confidentiality
 Right to Transparent Practices
 Right to fair and Equitable Treatment
 Right to Adequate Information
 Right to Initial and Continuing Disclosure
- Right to receive information about all the statutory and regulatory
disclosures.
 Right to Fair & True Advertisement
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 Right to Awareness about Service Parameters and Turnaround Times
 Right to be informed of the timelines for each service
 Right to be Heard and Satisfactory Grievance Redressal
 Right to have timely redressal
 Right to Suitability of the Financial Products
 Right to Exit from Financial product or service in accordance with the terms
of agreement with the investment adviser
 Right to receive clear guidance and caution notice when dealing in Complex
and High-Risk Financial Products and Services
 Additional Rights to vulnerable consumers
- Right to get access to services in a suitable manner even if differently
abled
 Right to provide feedback on the financial products and services used
 Right against coercive, unfair, and one-sided clauses in financial agreements
F. Expectations from the investors (Responsibilities of investors)
 Do’s
i. Always deal with SEBI registered Investment Advisers.
ii. Ensure that the Investment Adviser has a valid registration certificate.
iii. Check for SEBI registration number.
Please refer to the list of all SEBI registered Investment Advisers
which is available on SEBI website in the following link:
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognis
edFpi=yes&intmId=13
iv. Pay only advisory fees to your Investment Adviser. Make payments of
advisory fees through banking channels only and maintain duly signed
receipts mentioning the details of your payments.
You may make payment of advisory fees through Centralised Fee
Collection Mechanism (CeFCoM) of IAASB if investment adviser has
opted for the mechanism.
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v. Always ask for your risk profiling before accepting investment advice.
Insist that Investment Adviser provides advisory strictly on the basis of
your risk profiling and take into account available investment
alternatives.
vi. Ask all relevant questions and clear your doubts with your Investment
Adviser before acting on advice.
vii. Assess the risk–return profile of the investment as well as the liquidity
and safety aspects before making investments.
viii. Insist on getting the terms and conditions in writing duly signed and
stamped. Read these terms and conditions carefully particularly
regarding advisory fees, advisory plans, category of recommendations
etc. before dealing with any Investment Adviser.
ix. Be vigilant in your transactions.
x. Approach the appropriate authorities for redressal of your doubts /
grievances.
xi. Inform SEBI about Investment Advisers offering assured or guaranteed
returns.
xii. Always be aware that you have the right to exit the service of an
Investment Adviser
xiii. Always be aware that you have the right to seek clarifications and clear
guidance on advice
xiv. Always be aware that you have the right to provide feedback to the
Investment Adviser in respect of services received.
xv. Always be aware that you will not be bound by any clause, prescribed
by the investment adviser, which is contravening any regulatory
provisions.
 Don’ts
i. Don’t fall for stock tips offered under the pretext of investment advice.
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ii. Do not provide funds for investment to the Investment Adviser.
iii. Don’t fall for the promise of indicative or exorbitant or assured returns
by the Investment Advisers. Don’t let greed overcome rational
investment decisions.
iv. Don’t fall prey to luring advertisements or market rumors.
v. Avoid doing transactions only on the basis of phone calls or messages
from any Investment adviser or its representatives.
vi. Don’t take decisions just because of repeated messages and calls by
Investment Advisers.
vii. Do not fall prey to limited period discount or other incentive, gifts, etc.
offered by Investment advisers.
viii. Don’t rush into making investments that do not match your risk taking
appetite and investment goals.
ix. Do not share login credential and password of your trading, demat or
bank accounts with the Investment Adviser.
ANNEXURE G
DECLARATION CUM UNDERTAKING FOR SEEKING PRIOR APPROVAL FOR
CHANGE IN CONTROL
We M/s. (Name of the intermediary/the acquirer/person who shall have the control),
hereby declare and undertake the following with respect to the application for prior
approval for change in control of (name of the intermediary along with the SEBI registration
no.):
1. The applicant/intermediary (Name) and its principal officer, the directors or managing
partners, the compliance officer and the key management persons and the promoters
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or persons holding controlling interest or persons exercising control over the applicant,
directly or indirectly (in case of an unlisted applicant or intermediary, any person
holding twenty percent or more voting rights, irrespective of whether they hold
controlling interest or exercise control, shall be required to fulfill the ‘fit and proper
person’ criteria) are fit and proper person in terms of Schedule II of SEBI
(Intermediaries) Regulations, 2008.
2. We bear integrity, honesty, ethical behaviour, reputation, fairness and character.
3. We do not incur following disqualifications mentioned in Clause 3(b) of Schedule II of
SEBI (Intermediaries) Regulations, 2008 i.e.
(i) No criminal complaint or information under section 154 of the Code of
Criminal Procedure, 1973 (2 of 1974) has been filed against us by the Board
and which is pending.
(ii) No charge sheet has been filed against us by any enforcement agency in
matters concerning economic offences and is pending.
(iii) No order of restraint, prohibition or debarment has been passed against us
by the Board or any other regulatory authority or enforcement agency in any
matter concerning securities laws or financial markets and such order is in
force.
(iv) No recovery proceedings have been initiated by the Board against us and are
pending.
(v) No order of conviction has been passed against us by a court for any offence
involving moral turpitude.
(vi) No winding up proceedings have been initiated or an order for winding up has
been passed against us.
(vii) We have not been declared insolvent.
(viii) We have not been found to be of unsound mind by a court of competent
jurisdiction and no such finding is in force.
(ix) We have not been categorized as a wilful defaulter.
(x) We have not been declared a fugitive economic offender.
4. We have not been declared as not ‘fit and proper person’ by an order of the Board.
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5. No notice to show cause has been issued for proceedings under SEBI(Intermediaries)
Regulations, 2008 or under section 11(4) or section 11B of the SEBI Act during last
one year against us.
6. It is hereby declared that we and each of our promoters, directors, principal officer,
compliance officer and key managerial persons are not associated with vanishing
companies.
7. We hereby undertake that there will not be any change in the Board of Directors of
incumbent, till the time prior approval is granted.
8. We hereby undertake that pursuant to grant of prior approval by SEBI, the incumbent
shall inform all the existing investors/ clients about the proposed change prior to
effecting the same, in order to enable them to take informed decision regarding their
continuance or otherwise with the new management.
The said information is true to our knowledge.
(stamped and signed by the Authorised Signatories)
ANNEXURE H
PRINCIPLES FOR OUTSOURCING FOR INTERMEDIARIES
1. An intermediary seeking to outsource activities shall have in place a
comprehensive policy to guide the assessment of whether and how those
activities can be appropriately outsourced. The Board / partners (as the
case may be) {hereinafter referred to as the “the Board”} of the
intermediary shall have the responsibility for the outsourcing policy and
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related overall responsibility for activities undertaken under that policy.
1.1. The policy shall cover activities or the nature of activities that can be
outsourced, the authorities who can approve outsourcing of such activities,
and the selection of third party to whom it can be outsourced. For example,
an activity shall not be outsourced if it would impair the supervisory
authority’s right to assess, or its ability to supervise the business of the
intermediary. The policy shall be based on an evaluation of risk
concentrations, limits on the acceptable overall level of outsourced
activities, risks arising from outsourcing multiple activities to the same
entity, etc.
1.2. The Board shall mandate a regular review of outsourcing policy for such
activities in the wake of changing business environment. It shall also have
overall responsibility for ensuring that all ongoing outsourcing decisions
taken by the intermediary and the activities undertaken by the third-party,
are in keeping with its outsourcing policy.
2. The intermediary shall establish a comprehensive outsourcing risk
management programme to address the outsourced activities and the
relationship with the third party.
2.1. An intermediary shall make an assessment of outsourcing risk which
depends on several factors, including the scope and materiality of the
outsourced activity, etc. The factors that could help in considering
materiality in a risk management programme include-
2.1.1. The impact of failure of a third party to adequately perform the
activity on the financial, reputational and operational performance
of the intermediary and on the investors / clients;
2.1.2. Ability of the intermediary to cope up with the work, in case of non
performance or failure by a third party by having suitable back-up
arrangements;
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2.1.3. Regulatory status of the third party, including its fitness and probity
status;
2.1.4. Situations involving conflict of interest between the intermediary
and the third party and the measures put in place by the
intermediary to address such potential conflicts, etc.
2.2. While there shall not be any prohibition on a group entity / associate of the
intermediary to act as the third party, systems shall be put in place to have
an arm’s length distance between the intermediary and the third party in
terms of infrastructure, manpower, decision-making, record keeping, etc.
for avoidance of potential conflict of interests. Necessary disclosures in
this regard shall be made as part of the contractual agreement. It shall be
kept in mind that the risk management practices expected to be adopted
by an intermediary while outsourcing to a related party or an associate
would be identical to those followed while outsourcing to an unrelated
party.
2.3. The records relating to all activities outsourced shall be preserved centrally
so that the same is readily accessible for review by the Board of the
intermediary and / or its senior management, as and when needed. Such
records shall be regularly updated and may also form part of the corporate
governance review by the management of the intermediary.
2.4. Regular reviews by internal or external auditors of the outsourcing policies,
risk management system and requirements of the regulator shall be
mandated by the Board wherever felt necessary. The intermediary shall
review the financial and operational capabilities of the third party in order
to assess its ability to continue to meet its outsourcing obligations.
3. The intermediary shall ensure that outsourcing arrangements neither
diminish its ability to fulfill its obligations to customers and regulators,
nor impede effective supervision by the regulators.
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3.1. The intermediary shall be fully liable and accountable for the activities that
are being outsourced to the same extent as if the service were provided
in-house.
3.2. Outsourcing arrangements shall not affect the rights of an investor or client
against the intermediary in any manner. The intermediary shall be liable to
the investors for the loss incurred by them due to the failure of the third
party and also be responsible for redressal of the grievances received from
investors arising out of activities rendered by the third party.
3.3. The facilities / premises / data that are involved in carrying out the
outsourced activity by the service provider shall be deemed to be those of
the registered intermediary. The intermediary itself and Regulator or the
persons authorized by it shall have the right to access the same at any
point of time.
3.4. Outsourcing arrangements shall not impair the ability of SEBI/SRO or
auditors to exercise its regulatory responsibilities such as
supervision/inspection of the intermediary.
4. The intermediary shall conduct appropriate due diligence in selecting the
third party and in monitoring of its performance.
4.1. It is important that the intermediary exercises due care, skill, and diligence
in the selection of the third party to ensure that the third party has the ability
and capacity to undertake the provision of the service effectively.
4.2. The due diligence undertaken by an intermediary shall include assessment
of:
4.2.1. third party’s resources and capabilities, including financial
soundness, to perform the outsourcing work within the timelines
fixed;
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4.2.2. compatibility of the practices and systems of the third party with the
intermediary’s requirements and objectives;
4.2.3. market feedback of the prospective third party’s business reputation
and track record of their services rendered in the past;
4.2.4. level of concentration of the outsourced arrangements with a single
third party; and
4.2.5. the environment of the foreign country where the third party is
located.
5. Outsourcing relationships shall be governed by written contracts /
agreements / terms and conditions (as deemed appropriate) {hereinafter
referred to as “contract”} that clearly describe all material aspects of the
outsourcing arrangement, including the rights, responsibilities and
expectations of the parties to the contract, client confidentiality issues,
termination procedures, etc.
5.1. Outsourcing arrangements shall be governed by a clearly defined and
legally binding written contract between the intermediary and each of the
third parties, the nature and detail of which shall be appropriate to the
materiality of the outsourced activity in relation to the ongoing business of
the intermediary.
5.2. Care shall be taken to ensure that the outsourcing contract:
5.2.1. clearly defines what activities are going to be outsourced,
including appropriate service and performance levels;
5.2.2. provides for mutual rights, obligations and responsibilities of the
intermediary and the third party, including indemnity by the parties;
5.2.3. provides for the liability of the third party to the intermediary for
unsatisfactory performance/other breach of the contract
5.2.4. provides for the continuous monitoring and assessment by the
intermediary of the third party so that any necessary corrective
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measures can be taken up immediately, i.e., the contract shall
enable the intermediary to retain an appropriate level of control
over the outsourcing and the right to intervene with appropriate
measures to meet legal and regulatory obligations;
5.2.5. includes, where necessary, conditions of sub-contracting by the
third-party, i.e. the contract shall enable intermediary to maintain
a similar control over the risks when a third party outsources to
further third parties as in the original direct outsourcing;
5.2.6. has unambiguous confidentiality clauses to ensure protection of
proprietary and customer data during the tenure of the contract
and also after the expiry of the contract;
5.2.7. specifies the responsibilities of the third party with respect to the
IT security and contingency plans, insurance cover, business
continuity and disaster recovery plans, force majeure clause, etc.;
5.2.8. provides for preservation of the documents and data by third party;
5.2.9. provides for the mechanisms to resolve disputes arising from
implementation of the outsourcing contract;
5.2.10. provides for termination of the contract, termination rights, transfer
of information and exit strategies;
5.2.11. addresses additional issues arising from country risks and
potential obstacles in exercising oversight and management of the
arrangements when intermediary outsources its activities to
foreign third party. For example, the contract shall include choice-
of-law provisions and agreement covenants and jurisdictional
covenants that provide for adjudication of disputes between the
parties under the laws of a specific jurisdiction;
5.2.12. neither prevents nor impedes the intermediary from meeting its
respective regulatory obligations, nor the regulator from exercising
its regulatory powers; and
5.2.13. provides for the intermediary and /or the regulator or the persons
authorized by it to have the ability to inspect, access all books,
records and information relevant to the outsourced activity with the
third party.
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6. The intermediary and its third parties shall establish and maintain
contingency plans, including a plan for disaster recovery and periodic
testing of backup facilities.
6.1. Specific contingency plans shall be separately developed for each
outsourcing arrangement, as is done in individual business lines.
6.2. An intermediary shall take appropriate steps to assess and address the
potential consequence of a business disruption or other problems at the
third party level. Notably, it shall consider contingency plans at the third
party; co-ordination of contingency plans at both the intermediary and the
third party; and contingency plans of the intermediary in the event of non-
performance by the third party.
6.3. To ensure business continuity, robust information technology security is a
necessity. A breakdown in the IT capacity may impair the ability of the
intermediary to fulfill its obligations to other market
participants/clients/regulators and could undermine the privacy interests of
its customers, harm the intermediary’s reputation, and may ultimately
impact on its overall operational risk profile. Intermediaries shall, therefore,
seek to ensure that third party maintains appropriate IT security and robust
disaster recovery capabilities.
6.4. Periodic tests of the critical security procedures and systems and review
of the backup facilities shall be undertaken by the intermediary to confirm
the adequacy of the third party’s systems.
7. The intermediary shall take appropriate steps to require that third parties
protect confidential information of both the intermediary and its
customers from intentional or inadvertent disclosure to unauthorised
persons.
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7.1. An intermediary that engages in outsourcing is expected to take
appropriate steps to protect its proprietary and confidential customer
information and ensure that it is not misused or misappropriated.
7.2. The intermediary shall prevail upon the third party to ensure that the
employees of the third party have limited access to the data handled and
only on a “need to know” basis and the third party shall have adequate
checks and balances to ensure the same.
7.3. In cases where the third party is providing similar services to multiple
entities, the intermediary shall ensure that adequate care is taken by the
third party to build safeguards for data security and confidentiality.
8. Potential risks posed where the outsourced activities of multiple
intermediaries are concentrated with a limited number of third parties.
In instances, where the third party acts as an outsourcing agent for multiple
intermediaries, it is the duty of the third party and the intermediary to ensure that
strong safeguards are put in place so that there is no co-mingling of information
/documents, records and assets.
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IX. APPENDIX: LIST OF CIRCULARS / NOTIFICATIONS/
COMMUNICATIONS
Sr. Circular/ Notification/ Date Subject
No. Communication No.
1 Cir/ ISD/1/2011 23-Mar-11 Unauthenticated news circulated by
SEBI Registered Market
Intermediaries through various
modes of communication
2 CIR/ISD/2/2011 24-Mar-11 Addendum to Circular no.
Cir/ISD/1/2011 dated March 23,
2011
3 CIR/MIRSD/24/2011 15-Dec- Guidelines on Outsourcing of
11 Activities by Intermediaries
4 CIR/MIRSD/3/2014 28-Aug- Information regarding Grievance
14 Redressal Mechanism
5 CIR/MIRSD/5/2013 27-Aug- General Guidelines for dealing with
13 Conflicts of Interest of Intermediaries
and their Associated Persons in
Securities Market
6 SEBI/HO/MRD/DSA/CIR 19-Oct-16 Facilitating transaction in Mutual
/P/2016/113 Fund schemes through the Stock
Exchange Infrastructure
7 SEBI/HO/IMD/DF1/CIR/ 27-Dec- Measures to strengthen the conduct
P/2019/169 19 of Investment Advisers (IA)
8 SEBI/HO/IMD/DF1/CIR/ 09-Jan-20 Operating Guidelines for Investment
P/2020/04 Advisers in International Financial
Services Centre
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Sr. Circular/ Notification/ Date Subject
No. Communication No.
9 SEBI/HO/IMD/DF1/CIR/ 28-Feb-20 Operating Guidelines for Investment
P/2020/31 Advisers in International Financial
Services Centre (IFSC) –
Clarifications
10 SEBI/HO/IMD/DF1/CIR/ 06-Aug- Administration and Supervision of
P/2020/148 20 Investment Advisers
11 SEBI/HO/IMD/DF1/CIR/ 23-Sep- Guidelines for Investment Advisers
P/2020/182 20
12 SEBI/HO/IMD/DF1/CIR/ 28-Sep- Operating Guidelines for Investment
P/2020/185 20 Advisers in International Financial
Services Centre (IFSC) –
Amendments
13 SEBI/HO/MIRSD2/DOR/ 03-Nov- Advisory for Financial Sector
CIR/P/2020/221 20 Organizations regarding Software
as a Service (SaaS) based solutions
14 SEBI/HO/IMD-1/DOF- 31-Aug- Extension of time for seeking
1/P/CIR/2021/622 21 membership of BSE Administration
& Supervision Limited
15 SEBI/HO/IMD/IMD- 18-Jun-21 Framework for administration and
I/DOF1/P/CIR/2021/579 supervision of Investment Advisers
under the SEBI (Investment
Advisers) Regulations, 2013
16 SEBI/HO/IMD/IMD- 30-Sep- Guidelines for Investment Advisers’
I/DOF1/P/CIR/2021/632 21 - Extension of timelines
17 SEBI/HO/IMD/IMD-II 13-Dec- Publishing Investor Charter and
CIS/P/CIR/2021/0686 21 disclosure of Investor Complaints by
Investment Advisers on their
websites/mobile applications
18 SEBI/HO/IMD/IMD-I 21-Dec- Investment Advisory Services for
DOF1/P/CIR/2021/694 21 Accredited Investors
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Sr. Circular/ Notification/ Date Subject
No. Communication No.
19 SEBI/HO/MIRSD/ 28-Nov- Procedure for seeking prior approval
MIRSD-PoD- 22 for change in control
2/P/CIR/2022/163
20 SEBI/HO/DEPA- 25-Feb-22 Approach to securities market data
III/DEPA- access and terms of usage of data
III_SSU/P/CIR/2022/25 provided by data sources in Indian
securities market
21 SEBI/HO/MIRSD/ 05-Apr-23 Advertisement code for Investment
MIRSD-PoD- Advisers (IA) and Research Analysts
2/P/CIR/2023/51 (RA)
22 SEBI/HO/MIRSD/ 06-Apr-23 Usage of brand name/trade name
MIRSD-PoD- by Investment Advisers (IA) and
2/P/CIR/2023/52 Research Analysts (RA)
23 SEBI/HO/MIRSD/MIRS 10-Oct-23 Extension in timeline for compliance
D-PoD- with qualification and experience
2/P/CIR/2023/168 requirements under Regulation 7(1)
of SEBI (Investment Advisers)
Regulations, 2013
24 SEBI/HO/MIRSD/MIRS 02-May- Framework for administration and
D-SEC-3/P/CIR/2024/34 24 supervision of Research Analysts
and Investment Advisers
25 SEBI/HO/MIRSD/MIRS 07-May- Periodic reporting format for
D-PoD-2/P/CIR/2024/38 24 Investment Advisers
26 SEBI/HO/MRD/MRD- 24-May- Norms for sharing of real time price
PoD-3/P/CIR/2024/56 24 data to third parties
27 SEBI/HO/MIRSD/SECF 06-Jun-24 Uploading of KYC information by
ATF/P/CIR/2024/79 KYC Registration Agencies (KRAs)
to Central KYC Records Registry
(CKYCRR)
28 SEBI/HO/MIRSD/MIRSD 12- July- Recognition of BSE Limited as
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Sr. Circular/ Notification/ Date Subject
No. Communication No.
-POD-1/P/CIR/2024/101 24 Research Analyst Administration
and Supervisory Body (RAASB) and
Investment Adviser Administration
and Supervisory Body (IAASB)
29 SEBI/HO/ITD- 20-Aug-24 Cybersecurity and Cyber
1/ITD_CSC_EXT/P/CIR/ Resilience Framework (CSCRF) for
2024/113 SEBI Regulated Entities(REs)
30 SEBI/HO/MIRSD/MIRSD 13-Sep-24 Optional mechanism for fee
-POD-1/P/CIR/2024/120 collection by SEBI registered
Investment Advisers (IAs) and
Research Analysts (RAs)
31 SEBI/HO/MIRSD/ 22-Oct-24 Association of persons regulated by
MIRSD-PoD- the Board and their agents with
1/P/CIR/2024/143 certain persons
32 SEBI/HO/MIRSD/MIRSD 25-Oct-24 (A) Annual Compliance Certificate
-PoD1/P/CIR/2024/147 for Client Level Segregation by
nonindividual Investment Advisers;
(B) Timeline for submission of
periodic reports
33 SEBI/HO/MIRSD/ 27-Dec-24 Prior approval for change in control:
MIRSD-PoD- Transfer of shareholdings among
1/P/CIR/2024/164 immediate relatives and
transmission of shareholdings and
their effect on change in control
34 SEBI/HO/ITD- 31-Dec-24 Clarifications to Cybersecurity and
1/ITD_CSC_EXT/P/CIR/ Cyber Resilience Framework
2024/184 (CSCRF)for SEBI Regulated Entities
(REs)
35 SEBI/HO/MIRSD/ 07-Jan-25 Guidelines for Investment Advisers
MIRSD-PoD-
1/P/CIR/2025/003
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Sr. Circular/ Notification/ Date Subject
No. Communication No.
36 SEBI/HO/MIRSD/ 29-Jan-25 Details/clarifications on provisions
MIRSD-PoD- related to association of persons
1/P/CIR/2025/11 regulated by the Board, MIIs, and
their agents with persons engaged in
prohibited activities
37 SEBI/HO/IMD/IMD-SEC- 12-Feb-25 Service platform for investors to
3/P/CIR/2025/15 trace inactive and unclaimed Mutual
Fund folios-MITRA (Mutual Fund
Investment Tracing and Retrieval
Assistant)
38 SEBI/HO/MIRSD/MIRSD 17-Feb-25 Most Important Terms and
-PoD/P/CIR/2025/19 Conditions (MITC) for Investment
Advisers
39 SEBI/HO/ITD- 28-Mar-25 Extension towards Adoption and
1/ITD_CSC_EXT/P/CIR/ Implementation of Cybersecurity
2025/45 and Cyber Resilience Framework
(CSCRF) for SEBI Regulated
Entities (REs)
40 SEBI/HO/MIRSD/ 02-Apr-25 Relaxation of provision of advance
MIRSD- fee restrictions in case of Investment
PoD/P/CIR/2025/48 Advisers and Research Analysts
41 SEBI/HO/MIRSD/MIRS 04-Apr-25 Recognition and operationalization
D-POD/P/CIR/2025/51 of Past Risk and Return
Verification Agency (PaRRVA)
42 30-Apr-25 Clarifications to Cybersecurity and
SEBI/HO/ITD- Cyber Resilience Framework
1/ITD_CSC_EXT/P/CIR/ (CSCRF) for SEBI Regulated
2025/60 Entities (REs)
43 23-May- Accessibility and Inclusiveness of
SEBI/HO/MIRSD/SECF 25 Digital KYC to Persons with
ATF/P/CIR/2025/74 Disabilities
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Sr. Circular/ Notification/ Date Subject
No. Communication No.
44 SEBI/HO/MIRSD/MIRSD 02-Jun-25 Investor Charter for Investment
-PoD/P/CIR/2025/80 Advisers
45 SEBI/HO/DEPA- 11-Jun-25 Adoption of Standardised, Validated
II/DEPA- and Exclusive UPI IDs for Payment
II_SRG/P/CIR/2025/86 Collection by SEBI Registered
Intermediaries from Investors
46 SEBI/HO/ ITD- 30-Jun-25 Extension towards Adoption and
1/ITD_CSC_EXT/P/CIR/ Implementation of Cybersecurity
2025/96 and Cyber Resilience Framework
(CSCRF) for SEBI Regulated
Entities (REs)
47 SEBI/HO/ITD- 31-Jul-25 Rights of Persons with Disabilities
1/ITD_VIAP/P/CIR/2025/ Act, 2016 and rules made
111 thereunder- mandatory compliance
by all Regulated Entities
48 12-Aug-25 Use of liquid mutual funds and
SEBI/HO/MIRSD/
overnight mutual funds for
MIRSD-
compliance with deposit requirement
PoD/P/CIR/2025/116 by Investment Advisers and
Research Analysts
49 SEBI/HO/ ITD- 28-Aug-25 Technical Clarifications to
1/ITD_CSC_EXT/P/CIR/ Cybersecurity and Cyber Resilience
2025/119 Framework (CSCRF) for SEBI
Regulated Entities (REs)
50 SEBI/HO/ITD- 29-Aug-25 Extension of timelines and Update of
1/ITD_VIAP/P/CIR/2025/ reporting authority for IAs and RAs
121 w.r.t. SEBI Circular for Compliance
to Digital Accessibility Circular
‘Rights of Persons with Disabilities
Act, 2016 and rules made
thereunder- mandatory compliance
Page 98 of 99
Sr. Circular/ Notification/ Date Subject
No. Communication No.
by all Regulated Entities’ dated July
31, 2025 (Circular No. SEBI/HO/ITD-
1/ITD_VIAP/P/CIR/2025/111)
51 SEBI/HO/ITD- 25-Sep-25 Compliance Guidelines for Digital
1/ITD_VIAP/P/CIR/2025/ Accessibility Circular ‘Rights of
131 Persons with Disabilities Act, 2016
and rules made thereunder-
mandatory compliance by all
Regulated Entities’ dated July 31,
2025 (Circular No. SEBI/HO/ITD-
1/ITD_VIAP/P/CIR/2025/111)
52 HO/38/12/11(1)2025- 30-Oct-25 Ease of doing business measures -
MIRSD-POD/ I/71/2025 Enabling Investment Advisers (“IAs”)
to provide second opinion to clients
on assets under pre-existing
distribution arrangement
53 HO/38/12/11(1)2025- 30-Oct-25 Ease of doing business – Interim
MIRSD-POD/ I/73/2025 arrangement for certified past
performance of Investment Advisers
and Research Analysts prior to
operationalisation of Past Risk and
Return Verification Agency
(“PaRRVA”)
54 HO/13/19/13(2)2025- 08-Dec-25 Clarification on the Digital
ITD-1_VIAP/I/187/2025 Accessibility circulars of SEBI
55 HO/38/30/12(1)2025- 10-Dec-25 Relaxation on geo tagging
MIRSD-SEC-FATF requirement in India for NRIs while
undertaking re-KYC
****
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