On October 7, 2016, SEBI released a ‘Consultation Paper on Amendments / Clarifications to the SEBI (Investment Advisers) Regulations, 2013’, with the objective of specifying uniform standards for all intermediaries providing investment advisory services, regardless of whether it is their primary activity or not. The key changes proposed to the SEBI (Investment Advisers) Regulations, 2013 (‘IA Regulations’) are as follows:i. Limitation of Exemptions: The extant regime exempts from registration certain persons who provide incidental investment advice to their clients, such as portfolio managers, chartered accountants, etc. SEBI has proposed that certain exemptions be removed, as set out below:a. Mutual fund distributors who: (A) engage in providing incidental or basic investment advisory services on mutual fund products; or (B) want to shift from a commission-based model to an advisory fee-based model, be required to obtain registration; andb. other classes of intermediaries who provide incidental investment advice, be limited to those persons who provide advice under other regulations specified by SEBI (for example, merchant bankers and portfolio managers);ii. Investment Advice through Subsidiaries: Investment advisory services, which are currently provided through a separate division or department of banks, NBFCs and body corporates, should be provided exclusively through a separate subsidiary, and that a three year period be provided to comply with this provision;iii. Definition of ‘Investment Products’: SEBI has proposed to define ‘investment products’ as all financial instruments that are regulated by any financial sector regulator in India, other than provision of advice exclusively on non-securities market that is regulated by a sectoral regulator;iv. Advice through Electronic / Broadcasting Media: SEBI has now proposed to clarify that investment advice in any electronic or broadcasting or telecommunications medium, which is widely available to the public should comply with the provisions of Regulation 21 of SEBI (Research Analysts) Regulations, 2014 (‘RA Regulations’), which deals with recommendations in public media. Further, any such advice provided after getting clients enrolled, subscribed or registered on a public media platform will be considered as providing investment advisory services;v. Provision of Trading Tips or Recommendations: SEBI has proposed that no person will be allowed to provide trading tips or specific stock recommendations to the general public via SMS, email, telephone calls or social networking media, unless such person is either registered under the IA Regulations or specifically exempt from registration; andvi. Prohibition on Betting: SEBI has also proposed to prohibit any scheme, competition, game or league on securities or related to the securities market.vii. Clarification on the Roles of Research Analysts and Investment Advisors: SEBI has proposed certain clarifications to distinguish the role of research analysts and investment advisers, with the key distinction being that research analysts should provide the research report to all classes of clients at the same time, whereas investment advisers aid their clients in making an informed decision on whether the recommendations given in the research report are suitable for his/her risk profile. Making recommendations (to buy / sell /hold) with regard to a security, by providing an entire report, would be governed by the provisions of the RA Regulations.