Siddharth Shah is a registered investment adviser (RIA) and has been into practice for over four years. As the renewal of his license is coming up, we got chatting.
As I was about to hang up, he posed a question, “Kruti, how strict is SEBI in terms of complying with the new IA regulations? SEBI seems to be building suspense around it! Will it issue more clarifications?”
“True. Most of the investment advisers are still unsure of compliance requirements.”, I replied. “Do you have any particular concern regarding it?”
“You see, one of the revised criteria is the increase in qualification requirements, right? I am wondering how to fulfill that? It becomes difficult for new players in the market too.”
“Yes, that’s right. As you are aware, as per IA Regulations, 2013, the qualification requirements were:
…a professional qualification or a post graduate degree or post graduate diploma from a university or an institution recognized by the central government or any state government or a recognised foreign university or institution or association. The degree / diploma should be in finance, business administration, management, economics, banking, insurance or related field.
OR
…a graduate in any discipline with an experience of at least five years in activities relating to advice in financial products or securities or fund or asset or portfolio management.
The enhanced qualification requirements as per new regulations and amendments are:
A professional qualification or post-graduate degree or post graduate diploma (minimum two years) – in finance, accountancy, business management, commerce, economics, capital market, banking, insurance or actuarial science from a university or an institution recognized by the central government or any state government or a recognised foreign university or institution or association
OR
a professional qualification by completing a Post Graduate Program in the Securities Market (Investment Advisory) from NISM of a duration not less than one year
OR
a professional qualification by obtaining a CFA Charter from the CFA Institute
AND
an experience of at least five years in activities relating to advice in financial products or securities or fund or asset or portfolio management;
The requirement of having NISM certification (Series XA and XB) for investment advisers remains unchanged. There are other certifications too, accredited by NISM which are valid for Investment Advisers like CFP, CWM, etc. Click here to get the list of certifications.
So now, before making an application to SEBI, one should have post graduate degree / diploma plus 5 years of relevant experience plus NISM certification.”
“Oh! That’s a big change! So, is SEBI processing fresh applications under the new regulations? A friend plans to apply for RIA license.”
“Yes, SEBI is now processing the new applications with the enhanced qualification criteria. If your friend is planning to make an application to SEBI for Investment Advisers license, he will have to meet the new qualification criteria.
If he does not have the required experience, he has to either get employed in a wealth management firm or an investment advisory entity or with stock broker or any research entity. He need not be registered with SEBI to be employed with that entity. Even if he is a distributor of mutual funds or a stock broker for 5 years and has advised his clients, then in my view, SEBI will consider that as experience.”
“Hmm. What about the existing RIAs?” Siddharth was concerned. “I haven’t yet completed 5 years of my practice yet.”
“Well, the good news is, for existing RIAs, SEBI has allowed 3 years time to comply with the new qualification requirements. However, certification requirements have to be complied immediately.”
“Oh, that is a relief!” Siddharth exclaimed. “Thanks Kruti, you have been a great help. I will definitely tell my friend to get in touch with you for the application process.”
“Sure, you take care and be safe!”
Several queries on my blog are about qualification requirements for investment advisers and research analysts.
For now, there is no change in the qualification requirements for research analysts.
If you have specific queries regarding the RIA Regulations or are you are looking for professional help in making an application to SEBI, you can write to me at kruti@cskruti.com or opt for my phone consultation service. Click here for more details.
Hi Kruti
My friend was employed with MCX since November 2015 to Feb 2020 into multiple profiles of ERM, Corporate Office and Projects, Index Derivatives Business Development. Can that experience count for required 5 years incase of RIA?
Hi Aayush, SEBI requires experience related to advisory services. Was your friend involved in adivisory related activities? If no, then in my view, SEBI will not consider the same. However, best is to confirm with BSEASL.
Hi I have my MBA in marketing but i also cleared CWM (AAFM) So am i eligible for applying for Investment advisor under SEBI
Hi Aakash, Do you have minimum 5 years of relevant experience in activities relating to advice in financial products or securities or fund or asset or portfolio management?
No i don’t have 5 years of experience
Before making the application for investment adviser registration, you have to fulfill the experience criteria as well, as mentioned in my article.
Hi, mam without MBA in finance,
1.CFA
2.CFP
3. 5 years of mutual fund distributor Experience, can this make fulfill SeBi RIA requirements
Hi, yes, if you fulfill all the three criteria –
1. CFA Charter from the CFA Institute
2. CFP from the Financial Planning Standards Board of India
3. 5 years of MFD experience by submitting brokerage statements as proofs.
Hello!
I have a five year degree from National Law University Delhi – B.A.LL.B(Hons.) and have worked at a stock broker’s as dealer for the past five years. If I clear the NISM requirements, am I eligible for the RIA license as an individual?
Hi Siddharth, to apply for RIA license, you need a professional qualification or a post graduate degree. In my view LL.B is not considered as either.
Why do you want to apply as a RIA? Have you considered applying as a RA? Please share your details to kruti@cskruti.com
HELLO MAM I COMPLETED MY MBA IN BUSINESS ECONOMICS
AND PLANNING TO CLEAR NISM LEVEL 1 AND 2 EXAM
AFTER THAT WILL I GET SEBI CERTIFICATE??
ALSO MY SISTER COMPLETED BSC IN SCIENCE AND HAVE 5 YEARS EXP IN FINANCE FIELD IS SHE CAN APPLY FOR SEBI CERTIFICATE
WHO IS ELIGIBLE ME OR MY SISTER PLEASE REPLY
Hi Uday, before making an application to SEBI for IA license, you need to fulfill all the 3 criteria:
1. PG / MBA degree of minimum 2 years course duration
2. Minimum 5 years of experience in activities related to advisory or fund managament.
3. CFP or NISM certification.
If you or your sister fulfills the requirements, you can apply to SEBI.
Hope this helps.
Hello Kruti Ma’am, hope you are doing well.
My name is Aditya and I am an MBA (Marketing) from a well recognized university in India with around 4 years of total work experience (2 years Big 4 [Deloitte & EY] and 2 years family business as a Business Development Advisor). I also carry 3 months of full time work experience from a wealth advisory firm in Bangalore and well versed and quite strong in fundamental and technical analysis for securities.
I already cleared NISM Investment Advisor Certified L1 in March 2020 and now planning to give L2.
My question to you is:
1) Am I falling under the purview of 5 years experience in eligibility and even if I clear L2, is there a chance to get the advisory license as an individual?
2) If I clear the exam, will I be eligible to apply for the license after adding 1 more year of work experience (currently working in EY)?
Your response would really be helpful in taking the decision as to whether I should prepare for L2 or not if there is very less chance to get the license.
Thanks & Regards.
Hi Aditya, firstly you will need professional qualification or PG in finance, accountancy, business management, commerce, economics, capital market, banking, insurance or actuarial science. MBA in Marketing may not be considered by SEBI.
Secondly the experience has to be in activities relating to advice in financial products or securities or fund or asset or portfolio management.
I am afraid, currently you do not fulfill the qualification and experience criteria.
Thank you ma’am, this was really helpful.
I am a CFA charter holder. Do I still need to write NiSM exams in order to get RIA license?
Yes
Hi. Can a graduate with 10 yrs of experience and NISM certification of Investment Advisor apply for RIA license ?
Hi Viral, No, will need PG.
hi i have a diploma in insurance from insurance institute of india and a Btech in electrical engineering is my qualification enough for RIA or RA
Hi, for RIA you will need PG diploma in finance, accountancy, business management, commerce, economics, capital market, banking, insurance or actuarial science (2 years course) plus atleast 5 years of experience.
For RA, you will need PG in finance, accountancy, business management, commerce, economics, capital market, financial services.
Madam,
After completing Ciel’s Wealth Management Certification Basic and Advanced, can I apply for Registered Investment Advisor ?
or do I still need experience in the Financial sector?
You will need experience.
Thank you for your immediate reply madam.
Is it sufficient if I complete this iPG diploma program https://www.nism.ac.in/pgpipr/) to register as an investment advisor with SEBI, without experience in the financial sector?
Experience is mandatory to register as an IA.
Hi , i have experience of more than 10 yrs in the security market and mf , But not have degree , If i clear IA exams for both modules then will i be eligible for applying as RIA
Hi Sachin. You will need professional qualification or post graduation to be eligible to apply to SEBI.
An experience of at least five years in activities relating to advice in financial products or securities or fund or asset or portfolio management is mandatory qulaification. How to gain that experience without being an Investment Adviser?
Either by working in an entity as research analyst / investment adviser or being a distributor of mutual funds or a stock broker.
Is sub broker experience also considered?
Did you provide advice during your sub-broker experience? If yes, then the experience may be considered by SEBI.
Yes, How can I prove that I have advised during sub broker experience? Should I submit my clients P/L statements?
Hi, can your main broker give an experince certificate to that effect?
Is it legal to provide advice as sub broker if one arrange for that certificate as well ?
As a sub-broker, you can provide incidental advice to your clients. However, you have to also comply with the general obligation(s) and responsibilities as specified in Chapter III of the RIA regulations.
Ma’am can you put some light on how a LLP or a private Limited company get registered as a Investment Adviser from SEBI ?
A company / LLP first needs to fulfill the 2 main eligibility criteria – i.e it will first need a principal officer who fulfills the qualification and certification requirements as well as Rs. 50 lacs of networth.
Pls let me know if you have any specific queries.
Thanks for the above info.
What are the requirements for a principal officer? Does a principal officer need to hold any specific designation in the company?
The qualification and certification requirements for principal officer and the individual investment adviser is the same i.e. PF plus at least 5 years of relevant experience plus NISM certification.
Hi Kruti,
First of all thank you so much for such useful information, appreciate it.
Well i would like to know that i need to apply for IA or RA if i am just providing intraday, positional and ling term buy or sell calls to my clients. I just charge a fixed monthly fee and no profit sharing or anything. And i will be doing it via an app and whtsapp.
I am a Commerce graduate, and i have cleared nism research analyst part 1.
And about the experience thing, do I need to show all my salary slips for it or just a letter from the broker is fine?
Sorry about so many questions.
Thanks & Regards
Venus Shah
Hi Venus, if you are going to issue research reports, then you can get registered as a Research Analyst. Else as a RIA. For showing experience SEBI will ask salary slips.
Hi Kruti Maam,
I’ve gone through some of your post and now confused, it would be great if you clear some of my doubts.
I have done B.Tech and currently working in IT industry, Also I’m doing good in stock market and wanted to be an Investment adviser. According to your older posts I came to know that I need to fulfill 2 criteria before applying for my SEBI registration which are:
1. I need to have Post Graduate Finance degree or diploma (MBA in Finance or CFA) other courses are also there but I’m looking for these 2 only.
2. I need to clear NISM Investment advisor certification.
However in this article somehow I’m interpreting that 5 year experience is also mandatory with the above 2 criterias, is it right?
If that is the case then someone from non finance background can not get SEBI registration because even he clears the degree part he will not have 5 year of experience in finance.
Can you please suggest if my above understanding is true and even after that I want to be an Investment adviser What I can do in my case, Please suggest something, i’m in great dilemma now…
Hi Aman, your understanding is correct. SEBI has enhanced the qualification requirements and now you need to have qualification plus NISM plus experience. Also SEBI does not consider personal trading / investment as experience. So, in your case you need to have professional qualification / post graduate degree (2 years course) plus experience in activities relating to advice in financial products or securities.
So, Kruti if I plan to join as mutual fund distribution after completing NISM Mutual Fund Distribution exam and parallely plan to complete my 2 Year MBA program from Distance-Learning, Will I suffice the above criteria to apply for Investment advisor?
I’m ok to wait till 5 years, or if you have any other option than please suggest.
Yes provided MBA is from a university or an institution recognized by the Central Government or any State Government.
Mutual Fund distribution counts as experience?
In my view SEBI will count that as experience.
Where does it say that the post graduate degree has to be of 2 years? I dont find the wordings in the new notifications.
In SEBI (Investment Advisers) (Amendment) Regulations, 2020, pls refer to amendment for Reg 7 where the words “minimum two years in duration” is mentioned in the brackets. Here is the link to the regulations for your reference – https://www.sebi.gov.in/legal/regulations/jul-2020/sebi-investment-advisers-amendment-regulations-2020_47007.html
I have cleared Nism level 1&2,but i don’t have 5 year experience,have a pg (MBA), am i eligible???
Hi Harsh, before applying to SEBI for IA registration, you will need 5 years.
Hello Mam is CFP considered as Professional qualification?
Hi Amit, as per my interaction with the officers from some of the regional offices of SEBI, CFP is considered as a professional qualification. However there is no written confirmation from SEBI. So, best is to get in touch with SEBI’s regional / local office near you.
Hi what about those who have applied in sept 2019 and the applications are still pending
Hi Lakshmikanth, I am not sure how SEBI is processing such applications.
Even I am waiting for their final outcome.
Applied in Sept 19 and still my file is pending. Can I have your contact no ? If you don’t mind!!
Hi mam.
Thanks so much for sharing this knowledge.
I have a question.
Between CFP, SEBI RA, SEBI IA, which one is a better option for someone who wishes to offer portfolio service to general public?
Means offer which stock to buy and sell.
Hi. If you are going to provide research services on a particular stock, then you need RA license. If you are going to provide personalised advisory services you need IA license. You may refer to my article too – https://cskruti.com/should-i-register-with-sebi-as-investment-adviser-or-research-analyst/
Hope this helps.
Thanks so much
One last question.
If someone sells stock market course or personal finance course. do they need any registration or certification for that?
No registration or certification is required for providing stock market training or investor education.