Being an Investment Adviser is tough, especially if you are a new fee-only adviser. It takes time, effort and loads of patience to build an Investment Advisory practice true to the spirit of compliance of SEBI regulations.
Recently a registered adviser decided to surrender her license just after 2 years of registration. I also got a couple of queries from advisers who do not want to renew their registration, effectively leaving the practice.
If you have decided to discontinue your investment advisory business, you can voluntarily surrender the license to SEBI.
HOW TO SURRENDER YOUR RIA LICENCE?
While the decision to quit is hard, the process is relatively simple. With the introduction of IAASB (Investment Adviser Administration and Supervision Body), all the applications are routed through them whether it is for change of name / address or for surrender of license.
So, you will have to email the application along with the annexures and other documents to IAASB on their email id ia.membership@bseindia.com. To download the checklist, please click here.
However, before submitting the application to IAASB, you need to take care of the following:
#1 – Fulfilling all the Obligations:
Before proceeding with the surrender application, Make sure that all mandates / agreements / obligations have been either fulfilled or terminated.
However, you will still be liable for any obligations, penalties or violations under the SEBI Act, 1992 and SEBI (Investment Advisers) Regulations, 2013 incurred during the validity of your registration.
#2 – Giving a Newspaper Notice:
You need to give a notice in a widely circulated newspaper mentioning your intention to surrender the IA registration. SEBI application will not be approved till the completion of 30 days from the date of publication of the notice in the newspaper. So plan your application accordingly, timely action is crucial.
Here is a draft text of the Newspaper Notice:
“ I / we, <name of the investment adviser>, have initiated the process of surrendering my / our SEBI Investment Adviser license with registration no. ______ and BSE Enlistment no. ______. Aggrieved parties may lodge their grievances at https://scores.sebi.gov.in within 30 days of the date of the notice.
#3 – Submission of Original SEBI Certificate:
You also need to send the original SEBI Investment Adviser Registration certificate via courier or speed post or hand delivery, accompanied by a cover letter, to SEBI’s office in Mumbai at:
SEBI Bhavan II – RAC 2,
Market Intermediaries Regulation and Supervision Department,
Securities and Exchange Board of India,
2nd Floor, ‘G’ Block, Bandra Kurla Complex,
Bandra (E), Mumbai – 400051, Maharashtra
Keep the following ready:
#1 – Reasons for surrender
State the reasons as to why you want to surrender the certificate. Yes, you can be frank with your reasons.
#2 – List of all activities that are being carried out including those activities that do not relate to the securities market
You have to mention the details of the activities you carried out under the Investment Adviser License. It can be a brief write up on your activities as an Investment Adviser. You also have to mention the activities carried out by you even though they do not relate to the securities market. The details have to be provided in a declaration.
#3 – Cover letter
You have to draft a cover letter mentioning your intention to surrender the RIA license along with the reason to surrender the license and whether you are registered with SEBI as any other intermediary or not.
That’s it.
Note: Now, if you do not pay renewal fees, the license will expire and you will not be able to carry on the business as an investment adviser.
If you have any queries, you can write to me at kruti@cskruti.com