In January 2013, Securities and Exchange Board of India (SEBI) introduced regulations for the financial planners and the investment advisers in India. The regulations are known as SEBI (Investment Advisers) Regulation, 2013.
The reason is that most of the distributors advised financial products just to earn commissions. This leading to misselling of the products. The advice was based on the amount of commission they earn from the manufacturer of the product, irrespective of the client’s goal or risk appetite. This happened especially for products like mutual funds and insurance.
One of the main purposes of SEBI was to tackle this conflict of interest between distribution and advice on financial products. Most of the Investment Advisers regulation is aimed to tackle this conflict. It is to be noted that insurance is not under the ambit of SEBI, unfortunately.
As per this regulation, an individual can either be a distributor of financial product or an adviser of the same. However, the corporates, which are in business of advice and distribution, have been given some leeway. They can carry on both the businesses provided they have a subsidiary or a separate department for the investment advisory business.
Banks, however, do not have the option of separate department. It is mandatory for them to have a separate entity.
As per the SEBI (IA) regulation, it is now mandatory for an individual or a body corporate to register with SEBI if they are in the business of investment advisory.
If you have not registered yet, it is a matter of time that SEBI will ask you to register as Investment Adviser.
In this post, you will know the procedure to register as an Investment Adviser.
The application form is given in the regulation itself. Please refer to first schedule of the regulation – Form A. But before that you should check the eligibility criteria.
Let’s start.
ELIGIBILITY CRITERIA
#1 The qualification and certification requirements (Regulation 7)
You have to fulfill both the criteria:
a. Qualification : First, you should have a post qualification or a post graduate degree or post graduate diploma (2 years course) 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.
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.
Update: SEBI has approved the amendments to IA regulations and enhanced the qualification requirements. Click here to know more.
b. Certification : Second, you should have a certification on financial planning or asset or portfolio management or investment advisory services from either NISM or a organization or institution including Financial Planning Standards Board (FPSB) India or any recognized stock exchange in India provided that such certification is accredited by NISM.
NISM has come out with the certification examination for investment advisers. The examination is known as “NISM Series X-A and X-B: Investment Adviser” and has two levels.
Alternatively, you can also do other certifications which is accredited by NISM for Investment Advisers. Click here to know more.
So, for example, if you have M.Com degree and you take up the NISM examination, you fulfill the qualification and certification requirement.
In case of a company or LLP, the representatives and the partners, respectively, have to fulfill the criteria.
So, if a director of a company is not the person who is going to offer the investment advice, he need not fulfill the eligibility criteria.
To know more about qualification and certification requirements, click here.
#2 The capital adequacy requirement (Regulation 8)
This refers to net worth of the applicant. In case of individuals and proprietors firms, the net worth, in the form of net tangible assets, should not be less than Rs. 5 lakhs.
Body corporate such as a company or an LLP as well as partnership firms shall have the net worth of not less than Rs. 50 lakhs. The net worth definition is given in the regulations.
Update: SEBI has approved amendments to IA regulations and enhanced the net worth requirements. Click here to know more.
In case the net worth of the company is below the requirement, the company can increase its paid-up capital. In case of LLP, the partners need to bring in more contribution.
The applicant has to get the net worth / net tangible assets certificate from a Chartered Accountant.
You should apply for the registration as Investment Adviser only if you fulfill both the above requirements.
SUBMISSION OF APPLICATION
Investment Advisers have to submit their application online to SEBI / BASL.
Update: Along with submission of the application for license, the applicants have to make an application to BASL for its membership. Click here for more details.
Click here to know the process for making an application.
Once you submit the application along with application fees, SEBI will revert in case it needs more information or additional documents.
After you submit the further requirements, SEBI / BASL will send a communication that the application is approved and you are required to pay registration fees.
On payment of the registration fees, SEBI will issue a certificate in your name which will be valid for till the certificate is suspended by SEBI Board. SEBI has granted permanent license to IAs. Click here to know more.
So, here are the steps in brief:
- Check the eligibility criteria
- Prepare the documents and the application form
- Submit application to BASL / SEBI
- Communication by SEBI for further requirements
- Submit the addition requirements
- Communication by SEBI that the application is approved
- Pay the registration fees
- Issue of certificate by SEBI and BASL
This is the entire process to register with SEBI as an investment adviser.
Read more: 5 reasons why SEBI can put your application on hold.
FEES
First, application fees has to be paid to SEBI.
Once SEBI approves the application, you have to pay the registration fees.
Below is the current schedule for fees:
Please note that the old fee structure was applicable for the applications made before April 1, 2021.
Hope this article is useful to you and helps you understand the process of registration. In case of any queries or help or assistance with the registration process, feel free to get in touch at kruti@cskruti.com.
All the best!!
Hi kruti,
I don’t have educational qualification. To get investment advisor license as a corporate, can I hire a principal officer with necessary qualifications and experience?
How many people do I need in my company to get IA license?
Thanks.
Hi Sachin, yes you can hire. However, that person needs to be a director on board. You need minimum 2 people – one will be the principal officer (who fulfills the qualification and certification requirement) and the other the compliance officer. There is no qualification requirement currently specified for the compliance officer. Hope this helps. If you are looking for assistance in making the RIA application, please let us know.
Respected Mam
I want to know, If i want to provide stock market education like Technical analysis, fundamental analysis and all then can i provide it via a private limited company.
Now to provide education also is sebi registration needed or not.
Hi Sudhansu, yes you can provide stock market education via private company. In my view, one does not need SEBI registration if one is providing purely and solely education and no advisory or recommendation.
Hi Kriti,
I am a BBM graduate and have completed CFA L2. I have almost a decade of working experience in the financial services industry (Market Risk and M&A advisory team). Planning to take NISM exams soon. Will I qualify for RIA requirement, post clearing the exam? Kindly respond.
Hi Sujata, assuming you have the relevant experince certificates, you will fulfill the qualification requirements, once you have CFA charter degree.
Please read this for more details – https://cskruti.com/demystifying-enhanced-qualification-requirements-for-investment-advisers/
Can someone having a post graduate degree in Maths (M.Sc Mathematics) from centrally recognized well known Autonomous university eligible to write NISM cerification
There is no such pre-requisite to appear for NISM certifications.
thx. So a PG in Maths subject is qualified educationally to become SEBI certified IA ? (bcos i didnt see Maths in list of subjects like Finance,economics, mgmt etc so asking)
We suggest confirming the same with BSEASL. Here are the contact details – https://www.bseasl.com/DIRECTORY_OF_BASL_EMPLOYEES.html
Hi Kruti, Your article is truly helpful but I have some question
1. Some with B.Com + CFA but not 5 Years Work Experience is eligible to get an Investment Advisor Licence.?
2.Some with B.Com + 2Yr. Diploma Finance from IGNOU but not 5 Years Work Experience is eligible to get an Investment Advisor Licence.?
3. Some with B.Com + MBA Finance but not 5 Years Work Experience is eligible to get an Investment Advisor Licence.?
Hi. To make an application for RIA license, minimum 5 years of experience in activities related to advisory is mandatory.
Hi…
I want to know about the exempt modules in Investment Advisory Level-1 for CA, as there are some modules in this series. Can you please guide me on this.
Hi Madan, I would request you to check the NISM website or directly contact them.
Hey
If the entity is registered as PMS and wants to offer advisory services, does it require RIA license? Also, it the entity wants to offer RIA services, does it need to incorporate a different entity or can acquire RIA license under the same PMS entity? Thank you!
Hi Aditi, if the entity wants to offer only advisory services, then it will need the RIA license. Else the entity is exempted. You can get RIA and PMS license in the name of the same company. You will have to ensure proper segregation of services.
Hey Kruti,
The capital adequacy requirement for partnership firm is 50 lakhs not 5 lakhs. Right! You have mentioned it as 5 Lakhs.
Can a CA (chartered accountant) can register for Investment advisor, having just BCOM degree and CA.
You will need atleast 5 years of experience too along with the CA qualification. Here is a guidance note – https://cskruti.com/demystifying-enhanced-qualification-requirements-for-investment-advisers/
Hope this helps.
Hi, I have done PGDM in Finance and have 8 years of experience as Fundamental research analyst in a MNC. Is this satisfies the qualification requirement for RIA. Thanks
Hi Nirmal. Hope the PGDM course was of 2 years duration. SEBI requires advisory and “client facing” experience. Did you have one? If yes, then you fulfill the qualification requirements.
Hi Madam
I have B.com degree and i have confidence i will pass NISSN exam. But my question is without post graduation degree we can not get SEBI certificate. I have 30 clients already now. i need to get certificate. i don’t have any experience certificate in any company . I’m sole trader.
Hi Vishnu, can you pls elaborate your question / concern?
Hi Kruti,
Thanks for the wonderful article. I have a few questions.
1. Does back office experience in advisory and securities firms count?
2. What happens if a principal officer is not accepted by SEBI? Can we resubmit the same application with a different principal officer?
3. What is the system for change of principle officer after registration?
Thanks in advance for your answers
Hi,
1. If it is not a client facing job experience then it might not be accepted by SEBI. The experience should be in advisory, specifically.
2. Yes, you can resubmit the application.
3. You will have to intimate SEBI whenever there is a change. Currently it is done through an email / physical document sent to SEBI’s office.
Hi Kruti,
Thanks for a detailed article. I represent a large well funded corporate body. We want to create a child entity and apply for RIA license for that child organization. We have a PFM (Personal Finance Management) software product which we want to use to provide investment advice to our customers.
I have a few question on SEBI RIA license requirement:
1. Do we need to have the qualified representative who will be the advisor, at the time of application or is it sufficient to hire the representative before we start providing advice
2. Can the representative be on contract with the company instead of being a full-time employee
3. Is there a minimum number of representatives required to be representing our organization.
4. Is there any way we can get service for taking our organization through the licensing process
Thanks & Regards
Kantharaju
Hi Kantharaju, here is my response:
1. You will need to hire representative before making the application.
2. The representative has to be a full time employee
3. Minimum is 1. That person should be a director or should have an equivalent management position in the organisation.
4. If you are looking for my assistance in the application, pls share the details on kruti@cskruti.com
HI Kruti,
We are small startup and have products offering advise to stocks through in built software. I am one of the Director and applying for IA License on behalf of company. We do not have 50 lacs net worth as of now and our share capital is only 1 lac. Could you please suggest ways to fulfill this criteria.
Thanks
Hi Dinesh, the shareholders have to invest the required share capital to fulfill the criteria before making the application to SEBI. There is no other way to fulfill the requirement in my knowledge.
Thanks for your reply. Can I show accumulated Losses as Capital?
Regards
As per the IA regulations, “net worth” means the aggregate value of paid up share capital plus free reserves (excluding reserves created out of revaluation) reduced by the aggregate value of accumulated losses, deferred expenditure not written off, including miscellaneous expenses not written off, and networth requirement for other services offered by the advisers in accordance with the applicable rules and regulations.
Hope this helps.
Does FRM (GARP) certification qualify for SEBI registration?
Hi Rahul, I am not sure how SEBI treats foreign degrees. Best is to get in touch with SEBI’s regional office near you.
Hello,
My firm wants to give advisory on F&O to the clients, what are necessary compliance and certification required for the same.
Hi Aaditi, the requirements are already mentioned in the article. PLs let me know if you have any specific query.
Respected Mam,
Can I apply to get registered as an IA with sebi?
I have completed my internship / articleship under a Chartered accountant where advice in relation to financial products and services, assets are provided to clients along with tax planning.
I was serving as an intern for 5 years under a Chartered accountant regarding advice in financial assets n products.
Also I am registered with IRDA as an agent in LIC from last 4 years.
I also hold NISM XA XB certification along with MBA (finance) (distance learning) and mcom in foreign trade .
I have passed my CA final exam group 1 also and waiting for group 2 .
Please suggest!
You can apply to SEBI once you get the CA membership no. Also your experience certificate should clearly state your experience in advising in financial products.
Hii Kruti,
I am looking to apply RA individual registration from SEBI. having RA & Advisor certification.
So can you please help me out to get the registration.
Hi Sachin, pls send your education qualification details to kruti@cskruti.com.
i m a chemical engineer having 15 years exp of stock market and having NISM Research certificate ….am i eligible for research analyst registration . please reply
I would request you to read my article – https://cskruti.com/qualification-requirements-sebi-ia-and-ra/
Can a securities market lawyer with 10+ years experience in law obtain a registration? Thanks
Hi Harsh, as per the amendment regulation for Investment Advisers, one should have a professional qualification or post-graduate degree or diploma (minimum two years in duration) in finance, accountancy, business management,commerce, economics, capital market, banking, insurance or actuarial science from a university or an institution recognized by the Central or State Government.
Also experience should be in activities relating to advice in financial products or securities or fund or asset or portfolio management.
Since I do not have details about your qualification requirements, I will not be able to guide you on that. But in my view experience in law will not be considered by SEBI.
Can register b.com+mba in hr
No, MBA in finance is required. Also 5 years relevant experience will be required.
HI, We are a Pvt Ltd Co. Three are 2 Directors. Is it compulsory to furnish details of both the Directors or 1 Director is enough. (2nd Director is a wife). Also is CIBIL score is required for a Pvt Ltd Company?
Hi Kumar. If you are asking about qualification requirements, then atleast one of the Director or at least one of the employees needs to fulfill the qualification requirements. So in your case if only of the Directors is fulfilling the requirement then it is fine. However, you need to furnish other details of both the directors. Yes, CIBIL score is required for company. If you are looking for professional help in making an application to SEBI, pls write to me at kruti@cskruti.com
Thanks… I will write to you for help.
Thank you – appreciate the quick response. Is any experience certificate is also required for the representative of the company. If yes, what format is it? Is it a self declaration?
Yes, experience is required as per the enhanced criteria approved by SEBI. The experience certificate will have to be given by the employer. There is no format specified by SEBI.
Thanks – much appreciated
Hi Kruti,
I did two year full -time Post Graduate Diploma In Management (PGDM) in Finance from School of Management Sciences, Varanasi (2006-08) with 0 work experience. Am I eligible to become a Sebi registered investment advisor after I clear the required Nism exams? Will there be an interview also in the selection process? Do I require experience? Which documents are required at the time of registration? Is it only the qualifying degree certificate copies or graduation certificates also? How should I prepare for the selection process? Please reply.
Hi Noopur, I would request you to read this for all your queries – https://cskruti.com/demystifying-enhanced-qualification-requirements-for-investment-advisers/
There is no selection process at SEBI. If you fulfill the requirements of the regulations, registration is granted to you. However some of the local offices of SEBI call the applicants for further questions.
Thank u so much kruti for answering my query. Plz tell me what kind of job profiles will count as experience in this?
As mentioned in my article – https://cskruti.com/demystifying-enhanced-qualification-requirements-for-investment-advisers/
you have to either get employed in a wealth management firm or an investment advisory entity or with stock broker or any research entity. You need not be registered with SEBI to be employed with such entity. Even if you are a distributor of mutual funds or a stock broker for 5 years, SEBI will consider that as experience in my view.
Can you tell me if i going to complete nism certificate and i am 12 pass ..can i apply for register investment advisor with aebi
Hi Gurdeep. No you cannot go ahead with Investment Advisers registration. You can refer to my article on the enhanced qualification requirements by SEBI – https://cskruti.com/demystifying-enhanced-qualification-requirements-for-investment-advisers/
Hi Kruti,
Does completing the CFA program fulfil the qualification criteria?
Thanks
Hi Parth, you need to be CFA charter holder before you apply to SEBI as IA.
Does SEBI RIA have to abide by Regulation 16 wherein the adviser cannot trade in securities which are recommended by him/her within 30 days before and 5 days later?
Hi Anupam, do you provide a research product to your clients where you provide buy / sell / hold recommendations and / or research reports? If yes, then you need to abide by Chapter III of Research Analyst regulations which also includes Regulation 16. If no, then the IA or RA regulations do not specify compliance of Reg 16 of RA regulations. However, as per Reg 18.4 of IA regulations, as an investment adviser, you need to disclose your holding position in financial products or securities which you advice the client. Hope this helps.
Hi Kruti,
Thanks for your informative article.
I hold a Master’s degree in Marketing management and don’t hold any relevant experience nor certification in Financial field like CFP etc.
Will appreciate if you can share how can I become eligible to register as Investment adviser with SEBI.
Thanks & Regards,
Hi Shashidhar, to apply for Investment Advisers license, you need to have a PG degree or diploma in finance, commerce, economics, business administration, etc. You can apply for any of such courses from an institute or university recognised by Government. Hope this helps.
Hi Kruti,
Thanks for the knowledge sharing. Based on all your responses and the SEBI regulation of 2013, It is not straightforward for an engineer (BE degree – In IT industry from 12 years ) to be a SEBI registered IA because :
1) I do not have a relevant degree in finance/MBA in finance
2) I do not have 5 years experience in the finance field officially.
I am investing in MF/Equities from last 10 years and the “unofficial” IA/finance-planner for many friends/family who have successfully implemented my suggestions.
I am planning to complete CFP within 6 months which will take care of certification requirement
But what is the best way/options to get the qualification requirement to become SEBI registered IA?
Hi Kiran, there is not much clarity from SEBI whether CFP is considered as a professional degree or not. In my view it is not. However, you can check with an officer at SEBI’s regional office near you to see if it also helps in fulfilling the qualification criteria. Else the next option is not enrol for a course which will give you a post graduate degree or diploma in finance related fields. It can be a distance learning course too.
Hello Kruti,
This is Vinay from Tamil Nadu. I found your blog to be very informative.
By the way, I have two questions,
>>1
I had Completed B.Sc. (Comp.Sci), M.Sc., (Info. Tech)., M.B.A (H.R – through distant education from Bharathidasan University, Tamil Nadu) and M.Phil. (Comp.Sci).
Also i have completed NISM X-A and going to appear for X-B very soon.
Am i eligible to register with SEBI for RIA? if i pass X-B also? please to reply me with possible ways that could lead me to register with SEBI. if my eligibility is not gonna work, i would rather skip the idea and prefer to do something else.
>>2
I had already completed NISM V-A and obtained ARN code from AMFI. if I register with SEBI, what would happen to my ARN and how shall i proceed further with the mutual fund distribution?
Thanks in Advance.
Regards,
VINAY.
Hi Vinay, here is my response:
1. You need a post graduation in finance to become eligible to apply to SEBI as IA. OR you need minimum 5 years of experience in advisory services of any financial product. With your qualifications, you do not fulfill the criteria. However if you have 5 years of experience in mutual fund distribution, you can go ahead and make an application to SEBI.
2. SEBI may ask you to surrender your ARN registration as this will lead to conflict of interest. Would suggest to confirm with SEBI’s regional office near you.
hi ma’am, my name is pratik and i’m new to your blog page, one of suggested me to read i find it very clarifying and helpful. but i still have some doubts regarding to the CFP. But before bombarding you with that let just explain my situation to you.
i’m an engineer and will start MBA(MARKETING) from next year and with that i’ll start preparing for CFP and will get the required job experience after MBA. Now as my friend who is doing engineering+CFA(preparing)+CFP(will give). we both have a plan for starting a sought of investment advisory firm. so we were doing some casually research work regarding the rules and regulations. what we found really put us in a chaotic situation, we found to being an investment adviser/financial planner/financial adviser.
one should be following rule 7(A) and 7(B) from sebi. which is ” A person should have the post graduate diploma in finance, MBA in finance,diploma in finance etc… OR he/she should have minimum 5 years of work experience in that field” – this was rule 7(A). now rule 7(B) ” with the above mentioned criteria achieved one should have to pass 2 level examination created and conducted by SEBI. OR he/ she should do any course from FPSB India”.
so my confusion was that what if i do MBA in marketing will i be not be able to get registered myself as a financial adviser in SEBI. so my CFP course will go in vein,talking from providing services perspective. And will i not be able to give financial advice on co-operate level ? and above all what you suggest i should do?
please ma’am, provide me some help us, I’m really not seeing anyway out of it!
Hi Pratik, MBA in marketing will not be considered by SEBI. MBA in finance would have been helpful. You can do CFP / CFA. That will help you fulfill the qualification requirements. Else, get 5 years of experience in advisory related field or in distributing of financial products.
Ma’am sorry if I said anything which lead you to an wrong conclusion. Let me explain it little more clearly, what I meant was that I’ll do MBA in marketing with CFP. That will be an post graduate and CFP both. So after doing this will I full filling the criteria?
Hi Pratik, for Investment Adviser application you need a post graduation in finance. CFP may be considered either as a professional qualification or a certification as the same has been mentioned as certification requirement by SEBI. It will depending on the officer who handles your application. Best is to get in touch with SEBI’s regional office near you.
Hi Kruti,
Can you please tell me if I can start my PMS service if I have done Masters in Real Estate and finance from New York University?
Hi Rajan, looks difficult. In that case SEBI will also ask you about your experience in managing money or in advisory.
Hi Kruti,
Thanks for your reply. My wife is a CA and she has cleared level 1 of CFA but has no experience in advisory. Can she start a PMS? Also if she can, is it possible that I become the owner of the business and she is the fund manager?
Hi Rajan, your wife fulfills the qualification requirements for being the principal officer / fund manager. But you will still need atleast 2 persons who between them have 5 years of experience in advisory field. Yes, you can be the owner of the company. If you need professional help in PMS application pls write to me at kruti@cskruti.com
hello,i m a tybcom student and i m thinking to do a 1 year PG programme in financial management (distance learning) from MUMBAI UNIVERSITY and have cleared nism investment advisor exams X-A and X-B do i feel the requirements.
Hi Milind, yes, once you complete your B.Com and PG, you fulfill the qualification requirements.
Hi,
I have completed M.tech from IIEST, Shibpur. If I complete NISM research analyst exam, will I be eligible for Sebi registered research analyst? Will a diploma in finance eligible for RIA?
Hi Aikatan, in my view, you fulfill the qualification requirements under Regulations 7(1)(ii) of the RA regulations. However, best is to confirm with SEBI’s regional office near you.
If you have post graduate diploma in finance from a central or state government recognised university then you are eligible for RIA. If you are looking for professional help in making an application to SEBI, you can write to me at kruti@cskruti.com
Hi kruti, I am 12 pass going to clear NISM, my wife is doing post graduation, can we open financial advisory company in partnership? And what is registration amount for partnership as I am confused with the amount.
Hi Vijendra. Yes, you can open a partnership firm. Since your wife is doing post graduation (i hope in finance) she can be the investment advisor on behalf of firm. The application fees for partnership firm is Rs. 5,000 and registration fees is Rs. 10,000. If you are looking for professional help in making an application to SEBI, pls let me know.
Hi Kruti, I am an engineer and a CFA Charter holder with 15 years work exp in commodity. how can I start my equity advisory services
Hi Amit, you can start your advisory services by making an application and getting registered with SEBI either as an Investment Adviser or as a Research Analyst. If you need professional help, pls let me know.
Hey! I done Mba In HR & Merketing,can i go for the NISM exam or is it compulsory to have a Mba in finance to have registration a registration for Advisory Firm?????
Hi Harsh. For IA registration, you need to have MBA or any post graduation degree or diploma in finance, business management, accounting, economics, banking and insurance.
If a company is going to be a registered investment advisor, so who has to clear theNISM both level exam???
Hi Rashmi, the representative of the company, who is going to render investment advice to clients on behalf of the company, has to fulfill the qualification and certification requirements. NISM exam will help in fulfilling the certification requirements. The representative also has to fulfill the qualification requirements.
If you are looking for professional help in making an application to SEBI, pls let me know.
I
For Portfolio Management Service (PMS), what is the eligibility? Is experience needed for such registration?
Thanks!
Hi Piyush, I would request you to go through my article on PMS requirements – https://cskruti.com/pms-registration-with-sebi/
Pls let me know in case you have further queries. You can write to me at kruti@cskruti.com
HI CS Kruti. I am a CA,CS,CFA,MS-FINANCE,B.COM with 8 years experience in treasury, corporate finance and equity research. I wanted to open a PMS as an LLP. Since I do not have a net worth of 2 cr I am having a partner who would bring in the capital. I would be the portfolio manager. How can I go about it
Hi Vaibhav. You fulfill the qualification requirements to be the portfolio manager. The major requirements are listed in my article – https://cskruti.com/pms-registration-with-sebi/.
First you need to incorporate the LLP, fulfill the networth requirements and then apply to SEBI. The application process is online as well as offline. I can help you with incorporation of LLP as well as entire application process. If you are looking for professional help, pls write to me at kruti@cskruti.com.
I have completed my engineering in 2010.
I have a trading and investment experience of 5 years.
I do have bse,nism and 1 month broking company experience.
Just want to know, do i eligible for qualification requirement ?
For other requirement i am matched.
Hi Lakhan, you need to have a professional qualification or a post graduate degree or diploma in finance, commerce, business management, etc. SEBI does not consider personal trading experience.
Thank you CS KRUTI
If i do mba from ignou distance mba program, Would i eligible for the investment advisor ?
Where can i get the professional qualification information for sebi investment advisor ?
You need to have professional qualification or a post graduate degree or diploma from a university or an institute which is recognised by the central or the state government. There are no specific qualifications mentioned by SEBI.
I am a drop out and have my own financial education institute, can I apply for opening PMS services,
if yes how ?
Hi Kushal. What will be your role in PMS company?
How to become a portfolio manager and what is procedure and cost of sebi registration.
Hi Shubham,
First of all, only a corporate can apply for Portfolio Manager’s license. You have to make an application in Form A of the SEBI (Portfolio Managers) Regulations, 1993. The application can be made online too. There is a list of documents you need to submit along with the application. Click here to know more.
The networth requirement is Rs. 2 crores. You have to pay an application fees (non-refundable) of Rs. 1 lac and registration fees of Rs. 10 lacs.
In case of any queries or professional assistance, you can write to me at kruti@cskruti.com
Can Investment Advisor provides pms (portfolio management services) ?
Hi Shubham,
An individual investment adviser cannot provide advisory as well as execution services. If he / she wants to provide PMS, s/he can just provide advisory services. However, the same is not the case with corporates. A company / LLP can provide advisory as well as execution services through separate departments.
Hope I have answered your query.
So if I start a LLP with my wife as a partner I can put her in charge of execution and I can handle the advisory? She is an MA in Economics…
Hi Nitesh.
This is possible. However, if you are providing mutual fund distribution services, there are separate requirements for registration.
Also, you have to take care of the following things –
1. The client will not be under any obligation to avail the distribution or execution services offered by the other department.
2. There should be arms length relationship between activities of investment advisory and distribution or execution services. Both the departments should be independent of each other.
3. The fees charged for investment advisory should not include fees for execution services. All fees and charges paid for distribution or execution services by the client should be paid directly to the service providers and not through the investment adviser.
Thanks for the prompt replies Kruti…
I am not talking about MUTUAL FUNDS. I intend to offer fund management through a managed accounts service (special power of attorney from clients to operate their trading accounts).
I would trade–on their behalf through their own brokerage accounts–in equities, currency and commodity futures and they would pay management fees on AUM and profit-linked incentive fees to me.
As their brokerage commissions would be directly deducted on each executed trade by the brokerage platform (Sharekhan, ICICI Direct or better still a discount broker like Zerodha or Trade Smart Online etc.) execution fees coming to me would not be a question.
I believe I can offer this managed accounts service as an Investment Advisor to up to 15 retail investors/family offices etc. before I need to convert into a Portfolio Management Service?
So, I hope to operate as an Investment Advisor LLP with my wife as Partner and no execution fees/commission coming to me…do you see this as workable?
Greatly appreciate the advice…also if this structure is feasible I will contact you on a formal note for professional consultation on the same. Thanks!
Just to add, even the employees of the two departments should not be the same. If you can handle all that, you can go ahead with LLP or Company. The SEBI registration process and fees is the same for both.
Let me know.
Hi Kruti, I’m planning to do the 2-year PG Diploma in Financial Management (Distance Leaning) from Narsee Monjee (NMIMS). Will that qualify for taking then taking the NISM X-A and X-B exams for Investment Adviser certification?
Hi Nitesh,
The 2 yr PG diploma will qualify for the ‘qualification’ requirements. You will have to also do NISM XA and XB for certification requirements of the regulation. Hope I have answered your query.
If you need any professional help in applying to SEBI, pl do let me know.
Can I go to have the exam, with Mtech from Anna University CHennai…
Hi Sanjay,
Thanks for writing in! It would be helpful if you can be more specific about your query.
Just to give you a background, as per the regulations, you need to have a professional qualification / post graduate degree or diploma in finance or commerce
OR if you are a graduate in any filed, you should have atleast 5 years experience in giving advice on financial products or securities.
How do one gain experience in financial products or securities without having certificate ?
Is it like you finish NISM to become advisor and continue serving for 5 years before applying for LLP ?
Thanks
One can gain experience by either working with existing registered investment advisors, stock brokers, research analysts, mutual fund distributors, portfolio managers or by being distributor of mutual funds or a stock broker himself.