“Should I register with SEBI as an Investment Adviser or a Research Analyst?” Raj asked me. He had come over to discuss his plan for a startup which gives services related to stock advisory.
He was aware that Securities and Exchange Board of India (SEBI) recently notified the amendments to the regulations for Investment Advisers (RIA) and Research Analysts (RA).
Now, he was confused which one applied to him.
I asked him one basic question about his business idea. “Is your advice going to be the same for a large number of investors or are you going to give personalised advice to an individual?”
He thought for a moment and said, “the later one”. I told him that SEBI Investment Advisers Regulations will apply to him.
Feeling the curiosity in his response, I further explained to him, “SEBI Investment Advisers Regulations apply to ‘one-to-one advice’ model or giving personalised investment advice. It regulates the financial planners who make comprehensive goal based financial plans. These advisors have to, and most of the financial planners do, assess the risk of their clients and make a financial plan which is suited only to that particular client. The advice is for the benefit of that client. Hence, the investment advice may vary from client to client.
On the other hand, SEBI Research Analyst Regulation apply to entities or individuals who are providing research-based advice or recommendations or trading calls which any investor can follow as per his / her own decision. So, the principal here is ‘one-to-many advice’ model. The recommendation is given not keeping in mind any particular client but is based on the opinion of the research analyst.”
“Got it!” said Raj. “Since my advice is going to be customised as per the client’s financial needs, Investment Advisers regulations will apply.”
I nodded.
He further asked, “I am also planning to recommend a portfolio of stocks and suggesting percentage of allocation of one’s money to each stock, something like a model-portfolio. As of now there is only one portfolio. So, the portfolio will be the same for all. Under which regulations does this service fall?”
I answered, “If this is going to be the same portfolio for whoever subscribes for it, then it will fall under the Research Analyst Regulations. So, model portfolio service will fall under the RA Regulations.”
“What if I provide mutual fund recommendations too?” he added.
I said, “Research Analyst Regulations apply to providing research reports and buy / sell / hold recommendations on securities like stocks, mutual funds, debentures, derivatives, etc.”
I smiled and nodded again.
His curiosity was building up. He asked, “Okay, tell me, which regulations apply to an entity, which has different model portfolios and as the client provides inputs about his personal details, like income, risk appetite, etc, a portfolio is recommended to the client? Say, similar to robo advisory?”
“In my view, here too, SEBI Investment Advisers regulations apply, as the advice is dependent on the client’s inputs. Yes, I agree that two clients may be recommended the same portfolio, but this can happen in financial plans too!” I mentioned.
“Okay. What if as an individual investment adviser, I also writes research reports. I will do it for my clients, after all. And then I might also decide to distribute it for general investors for a fee. Will both the regulations apply in this case?”
I was glad he asked that question.
I answered, “Yes. If the individual is going to share reports for a fee, then both the regulations will apply.”
“Do you mean as an individual, I can register as RIA as well as RA?”
“Yes, SEBI has allowed individuals to register as both – IA and RA. However, you need to clearly segregate the activities. By that I mean, your clients cannot overlap. And of course, comply with the requirements under the respective licenses”, I answered.
“Kruti, as you know I am planning to provide financial planning services. Now, we are clear that IA regulations will apply to me. But you also know that this is a tough business and not many people in India are willing to pay fees to a financial planner. I was thinking of a few options here to start with:
- One, what if I become a mutual fund distributor as well.
- Two, I take up some job for such time till this business reaches some level.
- Three, I provide training to investors to invest in securities market through a course, may be introduce a couple of courses and charge a fee for them.
Are either of these options possible along with the SEBI license?”
I took a few moments to understand his concerns and then replied, “See Raj, it is very clear that you cannot carry on any activity along with your license if there is any conflict of interest. The same is the case for RA license as well. So, you cannot be a mutual fund distributor if you are an RIA or RA.”
The good news is SEBI has introduced a concept called ‘part-time RIA or RA’.
This is an option for people like you, who are planning to carry on other business activity along with RIA or RA activities. However, you also need to take the following into consideration:
- One, if you are thinking of a job, ensure that it cannot be a conflicting activity. You can take up a job in an IT firm or manufacturing business, etc. Also, you need to provide to SEBI a NOC from your employer.
- Two, in case you opt for a part-time RA or RIA license, then you can service only 75 clients at any given point. If you exceed or plan to exceed that number, you have to apply for a fulltime RA or RIA license and discontinue your employment or other business activity.
So yes, you can take up a non-conflicting job or provide an educational course along and register as a part-time RIA.
He smiled and said, “That’s wonderful. I am glad SEBI has considered this. Thanks Kruti. I don’t have any confusion now. You have to help me with the application process. And of course, later, with compliance.”
I smiled and said, “Yes of course! Let’s starts this asap.”
Is your case different from the above? Do share your query, and I will be happy to help you. If you need any help in getting yourself registered with SEBI as a Research Analyst / Investment Adviser, you can write to me at kruti@cskruti.com
Note: The views expressed above are my views based on my interpretation of the regulations. In case of any concerns, it is best to confirm your case with SEBI before you make the application.
Hello Ma’am
I before 15 cleared the MFD exam and got AMFI number before 10 days
Today I cleared NISM XV and plan to register as RA but I just learned i cannot operate as both under individual capacity
What are my possible options??
Convert AMFI into sole proprietor / RA application as sole proprietor / Is operating both is allowed as there are no clear guidelines (just grey area of conflict of interest)
Please guide.. Thanks.
Hi Raj, in our experience, RAASB and SEBI do not allow individuals to have both RA and MFD license. The same is possible in case of non-individual application.
However, we suggest getting in touch with the RAASB team for further confirmation.
Hi, can I work in a finance field in core equity research and still be a part-time RA?
Hi, to work as a part-time RA, the other activity should be a non-related and non-conflicting activity.
Hi Kruti,
I have a degree in B.tech. I want to apply for individual research analyst license.
I know that sebi does not consider engineering degree.
What are my options?
Is it possible to do 1 year Nism post graduate diploma?
Will that be enough for educational qualification?
I understand that I also need to clear Nism series XV exam.
Will these two things a. Nism 1 y post graduate program and b. Nism series XV certificate help me qualify for research analyst license?
Thanks in advance.
Hi Sachin, in the latest SEBI meeting, SEBI approved amendment to RA regulations where graduate in any field is eligible to apply. Yes, you will also have to clear NISM Series XV certification. Hope this helps.
thanks for educating people. I have one question can a private ltd limited registered as MFD take RIA or RA in case no can any any person take the RIA or RA and contrat with company to use the same for their recomendation in its website?
Yes, a private limited company registered as MFD can take RIA or RA provided it follows client level segregation compliance.
Hello Madam.
Thank you for your valuable insights. I want to get registered as an RA with SEBI . Could you help us with the registration process. Apart for the SEBI fees . How much will be your charges?
Hi, can you please send an email to kruti@cskruti.com with details of your education qualification? We can then take it forward.
Hi, I am a MFD from last 8 years. Can I become Research Analyst, assuming I had all other eligibility.
Please clarify
Hi, SEBI will ask you to surrender your MFD license if you want to register as a research analyst.
Hi Ma’am, Can a pvt ltd register as both RA and RIA? If yes, what are the things that the pvt ltd should keep in mind while conducting business as both RA and RIA together?
Hi Harpreet, yes, a pvt. ltd. company can register both as RA and RIA with proper segregation of departments and conducting services on arms length basis.
Can SEBI RIA offer black box algos?
To offer black box algos, you will need research analyst license.
Hi Mam
If I advice Black Box Algos to clients and allocate different strategies & different amounts to different strategies based on Risk, Exposure which clients want to devote to such Algos, should I register as RA or RIA?
Hi, will you be providing personalised Algo based strategies to suit the client needs? If yes, you will need IA license.
Mam, I selected RIA while logging in. Now, I want to change it to RA. Can I do it? If yes, how?
After 6 months, I’m planning to join an Investment banking firm. Then do I need to cancel my licence? And what if, after 1 year of my job, I plan to become RA again? I will have to do the entire process again?
Hi, we suggest you get in touch with the RAASB (BSE Limited) for your queries.
Mam I am MFD since more then 10 years I want to be a RIA and RA but my qualification BA in Arts please suggest me am I qualify . If not please suggest me which qualification shall I pass to eligible become RIA or RA
Hi, you will need a professional qualification or a post-graduate degree or diploma (minimum two years in duration) in finance, accountancy, business management, commerce, economics, capital market, banking, insurance or actuarial science or other financial services from a university or an institution recognized by the Central Government or any State Government.
hello thanks for this post, i want to take up research analyst business – non individual, i have completed bcom as well as the nism xv, as per the new jan 2025 regulations, will i be eligible? what are the requirements for a corporate structure, have you made a separate post on that? if yes please do share the link if not kindly let me know, my questions are since i am eligible for RA as per latest updates, will i be also eligible for being the principal officer in the business? and then what are the compliances that are followed like we need a independent compliance officer, so that officer has to be full time or CA or CS can do? and whats the process to apply to sebi?
Hi Sankalp, yes, if your B.Com degree is from a Govt. recognised university, you fulfill the qualification requirements. Here is the note for basic requirements for making an RA application – https://cskruti.com/wp-content/uploads/2025/01/note-on-RA-application.pdf
Yes, you can be the principal officer of the non-individual entity.
Please send an email with your requirements to kruti@cskruti.com.
Kruti Mam, can a MFD become a part time RIA ?
Hi, no s/he cannot.
Thanks Mam. You have been putting wonderful efforts to educate people regarding sebi rules and regulations. Grateful to you
Hello mam, my name is Amritanshu and I’m from Patna. I am commerce graduate and trading in stock market since 2020. Does my qualification and experience as a trader is enough to get sebi RA licence?
Hi Amritanshu, yes commerce graduate from a government recognised university or institution will help you fulfill the qualification requirements. You also need to complete NISM Series XV certification before you make the application. Hope this helps.
Hi Mam
If I advice Black Box Algos to clients and allocate different strategies & different amounts to different strategies based on Risk, Exposure which clients want to devote to such Algos, should I register as RA or RIA?
Hi Kruti,
I impressed a lot by your explanation.
I have a question, I want to start coaching classes about stock market. Are I need to register with SEBI ?
Contact: manishmalviya882@gmail.com
Regards
Manish Malviya
Hi Manish, if you are providing only education and training and not providing any discussion or discussing or analysing any particular stock / mutual fund, then you do not need SEBI registration.