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SEBI (Security Exchange Board Of India), a body responsible for regulating the securities and commodity market in India owned by the Government of India.

Recently on Wednesday, 13^th January 2021, it announced, that there will be a reduction in fees payable by individual and corporate investment advisors for a grant of a license and renewal of a certificate to practice. Also, a provision was added in this for taking membership of a self-regulatory association into account, while granting a certificate.

From sources, it is said that this amendment is done by the SEBI due to the increasing concerns about the viability of the profession in the year 2020. As per the reports, it has been observed that there are around 1500 SEBI registered investment advisers (RIA’s) in India, which is muss less on the count when compared to over 1,00,000 mutual fund distributors.

This data automatically raises the concern of the presence of not registered investment advisors on a large scale that might cheat people with their wrong schemes and promises.

SEBI might have realized that the reason behind this could be the high-cost charge of obtaining the SEBI RIA’s certificate. Thus, they came up with this idea.

What Is The Reduced Cost For Obtaining An RIA Certificate? 

After the amendment done in SEBI Investment Advisors Regulations, 2013, a fee of ₹2,000 will be payable by individuals and firms and ₹10,000 by bodies corporate (such as Limited Liability Partnerships or LLPs) when applying for an investment advisor certificate.

At the time of grant of certificate, a fee of ₹3,000 will payable by individuals and firms and ₹15,000 by bodies corporate.

In the case of renewal of a certificate, the fees have also been reduced to ₹1,000 and ₹5,000 respectively for the two categories of RIAs.

What Was The Cost Of Obtaining An RIA Certificate Before?

Under the SEBI Investment Advisors Regulations, 2013, a fee of ₹5,000 was payable by individuals and firms and ₹25,000 by bodies corporate (such as Limited Liability Partnerships or LLPs) when applying for an investment advisor certificate.

At the time of grant of certificate, a fee of ₹10,000 was payable by individuals and firms and ₹5 lakh by bodies corporate.

In case of renewal of a certificate, the fees charged were ₹10,000 and ₹5 lakh respectively for the two categories of RIAs.

What Do Advisers Have To Say About This?

Adviser around the country has welcomed this amendment of SEBI. For them, it is a great step that too during this COVID-19 pandemic, they said, “In case of renewal of certificate the fees have also been reduced from ₹10,000 and ₹5 lakh to ₹1,000 and ₹5,000 respectively for the two categories of RIAs”. The most prominent thing is that the lowering in cost will attract those on the margin to join the profession.

SEBI, the regulating body has always come up with new rules and provisions to ease down the process of investment in securities and commodities in the market, for both the investors and the distributors. Last year we have also seen many changes and new rules that were brought up by the SEBI like, the Mandatory asset allocation ratio for multi-cap funds, the introduction of the new Flexi-cap category, and many other steps.

For any kind of query you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.

Happy Investing!

(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee of future returns).