SEBI Board Meeting on February 17, 2020

Certain key decisions taken by SEBI in its board meeting dated February 17, 2020 are as follows:

i.     A ‘regulatory sandbox’ mechanism will be introduced, within which all SEBI registered entities will be eligible for testing new products, processes, services and business models on a limited set of eligible customers for a specified period of time and with certain regulatory relaxations.

ii.     A few key amendments proposed to the SEBI (IA) Regulations, 2013, with a view to strengthen the regulatory framework applicable to IAs, are: (a) segregation of advisory and distribution activities at client level to avoid conflict of interest, and prohibition on individuals from distribution services; (b) mandatory agreement between investment adviser and the client incorporating key terms; (c) clarification on payment of fees and introduction of an upper limit on the fees charged to investors; (d) enhanced eligibility criteria for registration as an IA including net worth, qualification and experience requirements; (e) restriction on the use of “Independent Financial Adviser (IFA)” or “wealth adviser” or other similar terms unless registered with SEBI as an investment adviser; (f) allowing implementation services (execution) through direct schemes / products in the securities market to IAs for the convenience of the investors.

Published In:Inter Alia - Quarterly Edition - March 2020 [ English Chinese japanese ]
Date: March 30, 2020