“Should I register with SEBI as Investment Adviser (RIA) or Research Analyst?” Raj asked me. He had come over to discuss his plan for a start up which gives services related to stock advisory.
He was aware that Securities and Exchange Board of India (SEBI) came out with two regulations regulating the intermediaries in the finance industry – SEBI (Investment Advisers) Regulation, 2013 and SEBI (Research Analysts) Regulations, 2014.
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 second one”. I told him, “In that case SEBI Investment Advisers Regulations will apply to you”.
Feeling the curiosity in his response, I further explained to him, “SEBI Investment Advisers Regulations apply to 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 report based advice or recommendations which any investor can follow as per his / her own decision. The recommendation is given not keeping in mind any particular client but is based on the research of the research analyst.
But yes, there are disclosures required by the SEBI regarding suitability of the advice, when you write a research report.”
“Got it!” said Raj. “I am going to provide a service which will provide stock recommendations to individuals. It will be based on a risk appetite of the client. So, 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. As of now there is only one portfolio. So the portfolio will be the same for all. Of course, I will mention about risk associated with that portfolio. 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.” (as per the amendment approved by SEBI on September 30, 2024).
“What if I provide mutual fund recommendations too?” he added.
I said, “Research Analyst Regulations apply to all those who write research reports and provide buy / sell / hold recommendations on securities like stocks, mutual funds, debentures, derivatives, etc.”
“Okay. So, if I don’t provide recommendations or advice, but I generally write on stock markets or any personal finance topics, both the regulations won’t apply, correct?”
Read more : When SEBI Research Analyst Regulations do not apply to you?
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 said.
“I have one more question to ask. What if an individual is a financial planner and also writes research reports. He will do it for his clients, after all. And then he might also decide to distribute it for general investors for a fee, like how I am planning to do. Will both the regulations apply in this case?”
I was happy he asked that question.
I answered, “Yes. If the individual is going to share reports for the fee then both the regulations will apply.”
Read more: Can an Investment Adviser provide research report on companies?
Aren’t there any exemptions? One of my friends mentioned to me that even mutual fund distributors and stock brokers are not required to get registered under SEBI Investment Advisers Regulations. Is that correct?”
“Yes, it is.” I answered. “Currently, as per SEBI, if you are an ARN holder, you are not required to get registered. But then, you can only provide incidental advice on mutual funds. If you want to do financial planning, or provide advice on MF portfolio or provide advice on stock, insurance, fixed deposits, etc. you have to get registered as an Investment Adviser and give up mutual fund distribution. SEBI has clearly mentioned the requirement of segregation of investment advisory activities and distribution activities. And, if you are an individual, segregation is not possible.”
Read more: SEBI bowls a googly with consultation paper on Investment Advisers
“What about calls we get on SMS, even though we have not subscribed to it? he asked. “They send bulk sms. What are they registered as? Research analyst, I guess.”
“Yes, that is correct!”
“I have one last question, Kruti. Can I register as both – investment adviser as well as research analyst?”
“Yes, SEBI is going to allow even individuals to register as both”, I answered.
He smiled and said, “Thanks Kruti. I don’t have any confusion now. You have to help me with the application to SEBI under Research Analyst Regulations. And of course, later, with compliance.”
I smiled and said, “Yes of course! Let’s starts this asap.”
Read more – How to get registered as an Investment Adviser with SEBI
Disclaimer: The views expressed above are my views and not confirmed by SEBI. Each regional office of SEBI may have different interpretation of the RA and IA regulations. It is best to confirm your case with SEBI before you make the application.
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
Will any regulations apply to someone who only gives index based advices and reccos (buy/sell) and tweets or writes the same on his/her blog?
If you are giving calls / recommendations / advice on index derivatives then SEBI regulations will apply.
Hello mam, I m a mutual fund distributor. can I apply registration for research analyst ?
Hi Rajesh, in my view, you will have to surrender your MFD license before you make an application to SEBI.
Hello, I am a stock sub broker, so how can I possibly do RIA?
Hi, if you want to get registered as an RIA, you will have to surrender your sub-broker license.
Hi mam, I have been working as research analyst with a globally renowned MNC bank for more than 5 years. Does my experience qualify for registration as an individual investment advisor?
Hi Manasvi, if your experience is in research relating to financial products or markets or securities, it can be considered by SEBI.
Hi Kruti,
I am running a sub brokering firm. By profession I m an option trader as well. I have been able to consistently generate profit in my client’s portfolios for a longer time now whether it be an equity or derivative portfolio of my clients.
Now I am planning to shift from broking revenue to a fee income charged on handling such portfolio. Which certificate should I go for.
Hi Shivam, in my view, you can either go for RIA or PMS registration.
For further queries, please send an email to kruti@cskruti.com
Mam , your article is very helpful and appreciated
I am currently a (sole proprietorship) SEBI-Registered Investment advisor. I wish to get registered as Research Analysts. What is probability to get research analysts certificate from sebi ?
Hi Payal, thank you. There are examples in the market where an individual has been given both RA and IA license. However, best is to confirm with SEBI’s regional / local office near you.
Hi Kruti,
Thanks for the detailed post. I hope this article is still relevant and the regulations have not changed that much.
I am working on robo-advisory+savings app. As I am coming from software engineering background with 15+ years of experience, can you please advise whether I am eligible to become RIA? If not, any other ways to do comply with this?
Cheers,
Murugan
Hi Murugan, yes the article is still valid. For RIA, you need 5 years of experience in advisory field along with PG. Since you do not fulfill the requirements, you can partner with someone who fulfills the qualification and certification requirements and get registered with SEBI as a non-individual.
Mam, I have completed PGDM (MARKETING MANAGEMENT) from AIMA DELHI(AICTE approved college). Am i eligible for SEBI Registered Research Analyst ? ARN Holder since 1 year ? NISM XV Research Analyst Completed
Hi Krishna, assuming the course is accredited by AICTE, prima facie you fulfill the qualification requirements of Regulation 7(1)(ii). However, the officer can insist on have a PGD in finance, accountancy, business management, commerce, economics, capital market, financial services or markets.
he is an ARN holder . is it possible to have registered reserach analyst with ARN holder
In my view, SEBI will not give RA license if one is also an ARN holder.
Mam, I have completed MCA (Master in computer application) from NIT Durgapur(AICTE approved college). Am i eligible for SEBI Registered Research Analyst ?
Prima facie you fulfill the qualification requirements under Reg 7(1)(ii). However, SEBI officers may have an additional requirement of having a finance degree. I would suggest you confirm with SEBI’s local / regional office near you.
Hi Kruti: I had one question. I am planning to start my own startup for investment advisory. My question is do I need to register as an investment advisor with sebi if the services I provide are free
Ankit
Hi Ankit, it depends on the manner in which you plan to provide the advisory services and the way are you planning to get yourself compensated for the same.
Thanks Kruti. The idea is to charge a flat subscription fee after 1 year and during the first year, not charge on advisory or trade execution
Technically, as per the regulations, an investment adviser is a person, who for “consideration”, is engaged in the business of providing investment advice. However, I am not sure how SEBI will treat this if you go for registration as an Investment Adviser after a year.
Hello Kruti mam, i want to register a company only for the purpose of trading in stock market (fno and equity). I will not be doing any other business activities in this company. Which company would be better for trading activities a private ltd company or a LLP or partnership firm? Thank you in advance mam
Hi Sumit, pls help me understand whether the company will trade or you will have clients to whom you will advise to trade.
If the company will trade, then such business will be classified as NBFC business. Here are more details – https://cskruti.com/does-my-company-need-non-banking-finance-company-nbfc-registration/
I would suggest to go for a normal partnership firm as the company / LLP may have to comply with RBI’s regulatory requirements and compliance.
Hello Kruti,
Thanks for this wonderful article. Very Informative.
To conduct / Teach Basics of Share Market / Fundamental and Technical Analysis / How to select Stock
Is it necessary to register with SEBI ??
To gain more Knowledge is it enough to get RA Certification without registering with SEBI ??
Interested in Teaching ( Only teaching ) close circle Basic of Share Market and supporting them to select stocks for a nominal Fee.
Can you guide me how to go about this ?
Hello Anuthama, my view – you do not need SEBI registration to conduct or teach basics of stock market or to teach the process of how to select stocks. But to select stocks for your subscribers / students / clients, you will need SEBI registration. Any body can take up NISM RA certification.
Hello Kruti,
Fist of all, Thank you for giving such important information. Please let me know, Can a Research Analyst provide both research reports & distribution services?
Manish Malviya
Hi Manish, you are welcome! In my experience SEBI has not allowed RAs to provide both research services and distribution services as SEBI sees this as a conflict of interest. In case you have any distribution license and apply to SEBI, the officer may ask you to surrender the license in between the application process.
All brokers are Register as investment advisor and provide distribution service
Can I be authorised person of Broker,Arn Holder and stock advisory to client but not charge fees
I will be registered as Non individual Investment Advisor.
A client can either be an advisory client or a distribution clients. You can read my blog for more details – https://cskruti.com/ia-amendment-regulations-2020/
Hello Kruti Ma’am
This is Jigar
I have done my graduation in business management in HR field and have good experience in trading
And i am just 21 years old…also, i am in crypto market since 2016 (was tracking bitcoin since than)..
Recently cleared NISM equity derivatives exams
And now i want to get my self registered with sebi for investment advisor…
Do i fulfill into sebi criteria?
If yess !? How can i apply ?
If not !? What changes do i need to do ?
Every reply is appreciated!
Thankyou,
From my side and from everyone to whom you replied!
Hi Jigar, I would request request you to go through my article – https://cskruti.com/demystifying-enhanced-qualification-requirements-for-investment-advisers/
Hope this helps.
One should have a 5 year’s experience in securities or investment products if one wants to get registered as an IA.
If one is already SEBI registered research analyst from past 5 years then those 5 years of experience would be conunted, while applying for IA.
If I am FINRA SEC USA Series 65 License can I give investment advice in India and can I get registered as investment advisor in India also.
Hi Harsh, to give investment advice to Indians, you need to get registered with SEBI.
I am a remisier for last 7 years with broker globe capital. plus i am mutual fund distributor and insurance agent. Do I need to discontinue the same before applying for Research Analyst or RIA ?
Is there any possibility that i can keep doing my regular work with these registrations?
contact no. 9891379734
In my view, SEBI will ask you to surrender the license for brokership as well as MFD and insurance agent before giving approval to register as RIA or RA.
Hi Mam,
I want to know SEBIs guidelines if i want to start advisory services mainly for positional trading/Short term trading in Equity, Future & Options etc.
Q.1. I am post graduate and have more than 7 years of experience with mutual funds and stock exchange, so is
NISM Certification is mandatory to start advisory services?
Q.2.Which NISM certification (Investment advisor/ Research analyst/ Or anything else) is mandatory,
to start advisory services for positional or short term trading?
Q.3. As per SEBI investment advisor or Research analyst certification, What are the products/Asset classes
covered? Can we provide advisory on trading products also?
Q.4 What is the difference between Investment advisor certificate and Research analyst certificate? can we do
both and what are the advantages/disadvantages if we have both certification?
Q.5. In trading, along with advice even execution is equally important and client may not always be able to
execute it, so what is a SEBI compliant way where advisor can advice and even execute trades as on when
required?
Thanks.
Hi Rugved, here are my views:
1. Yes
2. Since you say advisory services, I will assume you are talking about Investment Advisers registration. In that case its NISM Series XA and XB.
3. In case of Investment advisors – its is securities and investment products. In case of Research Analyst – it is only securities.
Securities mean stocks, bonds, debentures, derivatives, mutual funds.
4 and 5 – will not be able to explain here in the comments section. I would recommend you read various articles on my blog. Alternatively, you can opt for my phone consultation services.
Hope this is helpful.
hello mam
I have MBA degree in Marketing & International business with 2 years full time.
More than 7 years experience as a equity dealers in stock market with both certificate ( equity and currency derivative).
can I am eligible for registered investment advisor (RIA)?
please reply
Hi Sandeep, you need to have professional qualification or PG degree / diploma in finance, accountancy, business management, commerce, economics, capital market, banking, insurance or actuarial science. If you have the relevant work experience certificates / papers to show you have experience in stock markets, you will fulfill the experience criteria. For qualification criteria, I would request you to get in touch with SEBI’s local / regional office near you.
Can a SEBI registered research Analyst provide advisory services to the clients?
No, it will need IA license.
Hi Kruti, Thanks ,I found very useful your article ,I wish to ask the query,Can I be Sebi registered RIA and MF distributor both?
Hi Tushar, as an Individual, you cannot be both, RIA and MFD.
Hi Kruti…
Thanks For detailed information i have one question related to information provided by you.
I’m in stock trading since 10 Years and Doing well for Myself..Now I want to start Giving Calls to My Clients On subscription and Profit Sharing Basis..My Qualification is B.Sc.
So How can I registered myself With SEBI??
Do I need to Registered as Investment Advisor or Reserch Analyst??
Thanks in Advance
Hi Vyankat, before you apply to SEBI in either of the regulations, you need to fulfill the qualification requirements. You can search on my blog for qualification requirements for both the regulations. PLs note that SEBI does not consider personal experience as a fulfillment of experience requirements.
i want to provide intraday trading tips in my closed whatsapp/telegram group.
which category do i fall in please advise.
or is there any compulsion to get IA/RA to provide service i mentioned
SEBI wants tip providers to get registered as Investment Advisers.
So a research analyst cannot provide tips?
A research analyst can provide research based calls and recommendations along with research report.
Can I register both as research analyst and investment advisor.
Yes
As a sebi reg RA ,can we charge fees from clients for these calls and recommendations
Yes
Hi Can I hold and apply for SEBI Research Analyst along with being an ARN Holder.
Hi Preeti, SEBI might ask you to surrender ARN or not procure new business under the ARN once you get registered as an RA.
Hiii,
I am a sub broker with Zerodha for last one year. Do I need to discontinue the same before applying for Research Analyst??
Hi Priya, yes, most likely, SEBI will ask you to surrender the sub-broker license.
Hi I have a PGDBM certificate with specialization in Finance (2006-08), but I donot have any work experience in this field. I was doing my own business for last 10 years. Will it be a hurdle ????
To apply as an RIA, you need experience. You can apply for RA with PGDBM and NISM certification.
Is work experience as a SEBI registered RA considered for IA according to the new qualification requirements ?
Hi Aman, in my view, SEBI will consider the experience. However, best is to get in touch with SEBI’s local / regional office near you.
Can an RIA advise clients in Equity Derivatives trading ?
How much maximum fees can RIA charge ?
Yes, can advise. SEBI is expected to issue a circular on fees to be charged by RIA very soon.
I am science graduate and having 3 years experience in life insurance as an agent and 2 years in mutual funds as an distributor.
Am i eligible to register as RIA?
Please guide me to become as RIA.
Hi Vincent, although SEBI may consider your experience, you will still have to fulfill the qualification requirements of professional qualification or a post graduate degree or diploma. In my view you should enroll yourself for a 2 year course which will give you professional qualification or a post graduate degree or diploma in finance, accountancy, business management, commerce, economics, capital market, banking, insurance or actuarial science. For more details you may read this post – https://cskruti.com/demystifying-enhanced-qualification-requirements-for-investment-advisers/
Hi Kruti,
I have an engineering degree (graduation). For the past 12 years, I have been participating as an individual investor and have reasonable knowledge on researching a stock and valuations. I want to be a full time I want to start a proprietorship and manage portfolio’s under a service agreement of sharing profits.
Problem is i don’t have formal qualification in finance.
I was thinking of doing CFP (FPSB). WIll it help? Can i start my proprietorship after CFP and in the meantime get experience for Investment Adviser for registration after 5 years? Is this something allowed? If not, what are the options for me?
Hi Nihit, as an IA, you cannot charge fees as a percentage of profits. To manage portfolio and charge performance fee, SEBI expects you to register as a PMS company. For IA, yes, CFP will help. Yes, you can get experience by getting employed in an entity which has activities relating to advice in financial products or securities or fund or asset or portfolio management.
Hi Kruti, would like to ask what ask whether 1 year diploma in finance from distance education will suffice the purpose of qualification
I m a banker with 13 years of experience and have been trading the markets for last 15 years and if i clear the NISM examinations as per the requirement den can i be eligible to become SEBI registered RA
For RA, you need professional qualification or post graduate degree or diploma in finance, accountancy, business management, commerce, economics, capital market, financial services or markets. Personal trading is not counted as experience.
Hi Sameer, what do you want to get registered as – RA or IA?
Thanks for the clarification
Hi Kruti
Which regulation would apply if someone provides same model portfolio along with allocation to all clients?
Hi Sriram, in my view Investment Advisers regulations will apply.
Since the product is the same for all (irrespective of risk) why would RA not apply? Earlier you had mentioned an example where customization of product according to risk would attract RIA.
As per SEBI IA regulations, any portfolio service comes under IA. So model portfolio with allocation will definitely come under IA. The same has been mentioned in my article too. A research analyst provides research on a particular security with research report.
Hello Mam, thanks for the above information. I have a problem. An individual SEBI registered RA has also applied for registration as Investment Adviser registration in individual Name. It this OK as SEBI has asked to clarify how the compliance of the regulations 15, 17, 18, 24 of SEBI(RA) regulations and regulation 15, 17, 18 of SEBI (IA) regulations be ensured considering the person is an Individual.
Hi Ankit, yes an individual RA can apply for IA too. The said regulations for IA and RA are compliance requirements to conduct your business as IA and RA. You will have to respond accordingly. If you need assistance in replying to SEBI, pls share details on email and send to kruti@cskruti.com.
Hi Ma’m Thanks for easy insight into concept…I am Chartered Accountant and came to know that i need to complete NISM relevant certifications to become IA or RA ..but which would be wider in scope..as i am going into stock research and may opt for advisory in future. So what should I do now – registration of Research analyst or Investment advisor keeping in mind present and future need..
I feel that I should opt for Investment advisor registration so that I candi both…prepare research reports as well as rendering advisory services. Am i correct?
Hi Nitin, yes, IA has a wider scope. However, once you register as an IA, you will have to comply with the regulations accordingly. So if you are planning to provide investment advisory services in future and do not mind paying fees to SEBI again for IA, you can register for RA now.
Dear Kruti,
Thanks for the informative article. I have couple of queries with respect to the following text in your note.
“I have one more question to ask. What if an individual is a financial planner and also writes research reports. He will do it for his clients, after all. And then he might also decide to distribute it for general investors for a fee, like how I am planning to do. Will both the regulations apply in this case?”
I was happy he asked that question.
I answered, “No. In this case SEBI Investment Advisers Regulations will apply. SEBI Research Analyst Regulations has clearly mentioned that a registered investment adviser, who also issues research report or circulates/distributes research reports to public is not required to get himself registered under SEBI Research Analyst regulations. However, he has to comply with Chapter III of the regulation.”
Query 1: If an entity who is registered as an IA provides services which typically fall under RA then isn’t this entity supposed to comply with all IA regulations plus the Chapter 3 of the RA registration? If yes, then this entity has to do risk profiling etc of the customer though the service does not require it, Is this correct?
Query 2: If the entity is a corporate then in that case the IA registration can be an identified department that ensures IA complaince. For the new service that falls into RA it would make more sense for the entity to register as an SEBI RA for the new service it intends to start. Does this appear more appropriate.
Hi Rajesh, here is my response:
1. The entity has to segregate the activities and services pertaining to IA and RA and comply accordingly. If any of its services fall under RA, then the entity has to comply with Chapter 3 of RA regulations for that product/ service.
2. Yes, the entity can get registered as RA. However, as mentioned in my article too, in RA regulations there is a provision that if you are registered as IA, you need not get registered as RA again but comply with provisions of RA regulations. But best is to confirm with SEBI’s regional office near you.
Qualification and experience required for register as investment advisor ? Please Guide
Hi Abhijit. You will find the details here – https://cskruti.com/how-to-register-as-an-investment-adviser-with-sebi/. If you have any specific query, pls let me know.
Thanks mam
How to join your services I want to apply for registration.
Hi Raj, would be happy to help you. Pls let me know your place of business. You can send an email to kruti@cskruti.com
Hi mam I am 22 year old I completed my Bcom and NISM exam also Investment advisor and Research analyst and I also have 5 years of experience in financial market of 2 companies. I started job at college by internship and full time job. Now my question is I am very confuse I want to apply for license form SEBI is there any issue with age because I started job at 17 when I was in college or SEBI will ask any questions regarding age.
Can I apply SEBI registration if yes than I want to make registration by your consultation i will join your services for license registration.
Thanks
Hi Raj, there is no issue with the age. If you have the experience certificates from the 2 companies, you can go ahead and make the application.
hey Kruti, thanks for the information.. i am still confused.
i am a registered sub broker, hold ARN, CMT(tchnical analysis), grduate with over 15 years of experiemce(10 years employed with broking co). i would like to publish buy/sell recommendations on my blog as well as personalised advice to my broking clients. which category do i fall in please advise.
Hi Amit, you can go for Investment Adviser registration. However, SEBI may ask you to give up sub-broker registration and ARN license if you want to get registered as Investment Adviser.
Hey! This article is really informative but I have one question. As a SEBI registered research analyst, what are the restrictions on my personal trading?
Thanks Suyash for your feedback. As for your query – there are restrictions on your personal trading. One such restriction is – you can not deal with your recommended security 30 days before and 5 days after the publication of research report. The restrictions are mentioned in the Reg. 16 of SEBI (Research Analysts) Regulations, 2014. Also, if you are an analyst, working with an entity registered as RA, the entity will have its own policies for trading by employees. Hope this helps.
Thanks for your response, Kruti!
Could you also tell me regarding the qualification requirements? I do not have a PG degree but I’m a graduate and I’ve been involved in trading the financial markets since 2011. Now they say that they need either a PG degree/ diploma or a graduate with 5 years of experience but they’ve not mentioned if it necessarily needs to be under an employer. Do you think I’m eligible with my independent practice?
Suyash, first of all there are two qualification requirements that any research analyst has to fulfill, at all times. One is about professional qualification as per regulation 7 or a graduate with 5 years experience in financial activity. As per what you mentioned, you fulfill the criteria. The second one is to have NISM certification as specified by SEBI for research analysts (NISM-Series-XV: Research Analyst Certification Examination). Only when you fulfill both the criteria, you will be eligible to practice as Research Analyst. Hope this answers your questions.