Who Needs to Register as an Investment Adviser?

In India, Investment Adviser Registration is mandatory for any individual or entity that offers advisory services related to investments in securities or provides research analysis. According to SEBI's Investment Advisers Regulations, 2013, anyone offering these services for a fee must be registered.

This requirement applies to:

• Individuals
• Partnership firms
• Limited Liability Partnerships (LLPs)
• Corporations
• Other entities providing investment advice

However, certain professionals, such as bankers, chartered accountants, or insurance agents, who provide incidental investment advice in the course of their primary services, are not required to register. But, if they choose to offer investment advisory as a standalone service, they must register with SEBI.

Obligations and Responsibilities of SEBI Registered Investment Advisors

Investment advisors registered with the Securities and Exchange Board of India (SEBI) must adhere to specific obligations and responsibilities:

1. Fiduciary Duty: They must act in the best interest of their clients.
2. Confidentiality: Advisors are responsible for safeguarding client information.
3. Code of Conduct: They must comply with SEBI's prescribed Code of Conduct.
4. Risk Profiling: Conduct risk assessments and ensure investments align with client risk profiles.
5. Record Keeping: Maintain written records for a minimum of five years.
6. Grievance Redressal: Implement systems to address client grievances.
7. Prohibition of Fraud: It is illegal for any investment advisor to employ fraudulent schemes against clients

Key Regulations for SEBI-Registered Investment Advisers

A SEBI-Registered Investment Adviser (RIA) must comply with several regulatory provisions, ensuring transparency, client protection, and ethical advisory practices. Key regulations include:

• Registration Requirement: Investment advisers must complete the formal registration process on BSE Portal and meet specific educational, professional, and experience criteria.
• Fiduciary Responsibility: The adviser is expected to act in the best interests of their clients, ensuring unbiased, objective, and independent advice.
• Full Disclosure: Investment advisers are required to disclose relevant information about their services, including fees, charges, and any potential conflicts of interest.
• Record-keeping: Detailed records of client interactions, transactions, and advice must be maintained to ensure accountability and transparency.
• Regulatory Compliance: SEBI's regulations govern various aspects, including advertising, client confidentiality, and conflict-of-interest management.

Eligibility and Qualifications for Investment Adviser Registration

To qualify for Investment Adviser Registration with SEBI, candidates must meet the following eligibility criteria:

• Age: At least 21 years old.
• Experience: A minimum of five years of relevant professional experience in finance, investments, or related fields.
• Criminal Record: No prior convictions for economic crimes or violations of securities laws.
• Net Worth: A minimum net worth of Rs. 1 lakh for individuals and Rs. 25 lakhs for non-individual entities.
• Prohibited Associations: Applicants should not be a stockbroker, sub-broker, depository participant, or linked to such entities.

Additionally, the candidate must have an appropriate educational qualification. This includes:

• A professional qualification or postgraduate degree in finance, economics, business management, or a related field from a recognized institution.
• An NISM Certification for Investment Adviser is required

Is NISM Certification mandatory to become an Investment Adviser?

No, it is not mandatory if you fulfill the first point criteria as mentioned above. However, it is recommended to have a NISM Certification for smooth registration process.

Some recognized qualifications include:

• Chartered Accountant (CA)
• Company Secretary (CS)
• Chartered Financial Analyst (CFA)
• MBA in Finance

Benefits of SEBI-Registered Investment Adviser

Becoming a SEBI-Registered Investment Adviser provides several advantages for both the advisor and their clients:

1. Enhanced Credibility: Registration with SEBI boosts the adviser’s reputation and credibility in the market, as it indicates that the adviser has met high standards of professional competence and ethical conduct.
2. Regulatory Compliance: SEBI's strict regulatory framework ensures that advisers operate in a legal and compliant manner, offering clients protection from fraud and unethical practices.
3. Expanded Business Opportunities: With SEBI registration, investment advisers can expand their services to include portfolio management, financial planning, and other advisory functions, helping attract more clients and scale their business.
4. Professional Development: Investment advisers must stay updated with the latest market trends, industry regulations, and investment strategies, ensuring they are well-equipped to serve clients effectively.
5. Investor Protection: SEBI offers a dispute resolution mechanism, which helps resolve conflicts between advisers and clients, ensuring fairness and transparency in advisory relationships.

Documents Required for Investment Adviser Registration

The following are the documents required for Investment Adviser Registration:

Documents/Details Required in case of Body Corporate/Company

1. 15-digit GST number or relevant declaration
2. PAN card of the firm/applicant
3. Address Proof

• If the Address is owned by the applicant: - Sales Deed/ Recent Utility Bill
• If the Address is not owned by the applicant:

1. Registered Rent agreement or Bank Statement or Passbook
2. NOC from the Owner (only incase of residential address)
3. Ownership Proof (sales deed/recent utility bill)
4. Certificate of Incorporation (CoI)
5. Memorandum of Agreement (MOA) or any other relevant document {MOA annexure shall include only the clauses related to name, registered office, object clause, first and the last page}
6. Whether the applicant is registered as Authorised Person with any stock Exchange or with AMFI

• If not registered with Stock exchange or AMFI, provide relevant declaration in pdf format on the letterhead of the applicant company & signed by the Authorised signatory

7. Shareholding details of the applicant company on company letter head (UBO details to be provided if holding share is 9% and above)
8. Details of ownership/directorship of the Directors in any other companies / partnership interest in any firm or LLP
9. Copy of ITR return or copy of Form 16 of the last 3 years of the applicant
10. List of associated companies registered with SEBI, RBI, IRDA or PFRDA along with registration number –

• If Yes, provide details
• If No, then provide relevant declaration in pdf format on the letterhead of the applicant company & signed by the Management

11. Details of the net worth certificate from Chartered accountant, not more than 6 months old
12. Proposed business plan & means of achieving the same (Ensure that the details, if any, of fees and asset under advice are in accordance with the relevant regulations)
13. Details of office space, office equipment, furniture and fixtures, communication facilities, research capacity, research software for undertaking investment advisory services
14. Details of all settled and pending disputes in the last 5 years:

• If Yes, provide details
• If No, then declaration regarding all settled and pending disputes in last 5 years

15. Details of the credit report/ score from CIBIL for the applicant.

Documents/Details Required in case of LLP/Partnership Firm

1. 15-digit GST number or relevant declaration
2. PAN card of the firm/applicant
3. Address Proof

• If the Address is owned by the applicant: - Sales Deed/ Recent Utility Bill
• If the Address is not owned by the applicant:

1. Registered Rent agreement or Bank Statement or Passbook
2. NOC from the Owner (only incase of residential address)
3. Ownership Proof (sales deed/recent utility bill)
4. LLP/Partnership Firm

• For partnership firms- registered partnership deed and certificate of registration from registrar of firms.
• For LLPs- incorporation certificate and registered partnership deed

5. Details of ownership/directorship of the partners in any companies/partnership interest in any firm or LLP
6. Copy of ITR return or copy of Form 16 of the last 3 years of the applicant
7. Details of the requisite qualification / experience of the principle officer (education certificates and 3rd party experience certificates may be obtained)
8. Details of the number of persons associated with investment advice, if any, who shall render investment advice on behalf of the applicant and their qualification /experience and certification details

• Certificates of completion of the course(s) – The name of the courses and the institution to be mentioned
• Experience certificates duly authorised by the employers on their respective letter heads
• A certification on Financial Planning or Fund or Asset or Portfolio Management or Investment Advisory Services – NISM X-A and X-B or valid CFP Certificate(s)

9. Copy of assets and liabilities (Balance Sheet) statement and certification of networth of the entity certified by a Chartered Accountant CA (not more than 6 months old at the time of filing of application to SEBI and the membership number of the CA must be included in the certificate
10. Each document to be provided on company letter head as separate annexure:

• Document of proposed business plan and means of achieving the same, fees charged, services offered, etc
• Process to be followed by the applicant for risk profiling of their clients and for assessing their suitability of advice supported by a sample risk profile questionnaire
• Details on activities of the applicant
• Infrastructure details

11. Details of all settled and pending disputes in the last 5 years:

• If Yes, provide details
• If No, then declaration regarding all settled and pending disputes in last 5 years

12. Details of the credit report/ score from CIBIL for the applicant

Documents/Details Required in case of individual/Sole Proprietor

1. 15-digit GST number or relevant declaration
2. PAN card of the applicant
3. Address Proof

• If the Address is owned by the applicant: - Sales Deed/ Recent Utility Bill
• If the Address is not owned by the applicant:

1. NOC from the Owner (only incase of residential address)
2. Registered Rent agreement or Passport or Bank Statement or Passbook
3. Ownership Proof (sales deed/recent utility bill)
4. Details of the requisite qualification / experience of the applicant and person associated with investment advice (education certificates and 3rd party experience certificates may be obtained)
5. Details of the Identity Proof and address proof of applicant and persons associated with Investment Advice, if any
6. List of associated companies registered with SEBI, RBI, IRDA or PFRDA along with registration number:

• If yes, provide details
• If no, then provide relevant declaration in pdf format on the letterhead of the applicant & signed by the Management

7. Details of ownership/directorship of the applicant in any companies or partnership interest in any firm or Limited Liability Partnership
8. Copy of ITR return or copy of Form 16 of the last 3 years of the applicant
9. Copy of assets and liabilities (Balance Sheet) statement and certification of net worth of the entity certified by a Chartered Accountant CA (not more than 6 months old at the time of filing of application to SEBI and the membership number of the CA must be included in the certificate)
10. Each document to be provided on company letter head as seperate annexure:

• Document of proposed business plan and means of achieving the same, fees charged, services offered, etc
• Process to be followed by the applicant for risk profiling of their clients and for assessing their suitability of advice supported by a sample risk profile questionnaire
• Details on activities of the applicant
• Infrastructure details

11. Details of all settled and pending disputes in the last 5 years:

• If Yes, provide details
• If No, then declaration regarding all settled and pending disputes in last 5 years

12. Details of the credit report/ score from CIBIL for the applicant

If you’re looking to register as an Investment Adviser with SEBI, the process involves multiple steps that need to be followed carefully. Below is a detailed guide on how to complete the registration process through the BSE India portal.

Online Step-by-Step Process for Investment Adviser Registration

If you’re looking to register as an Investment Adviser, the process involves multiple steps that need to be followed carefully. Below is a detailed guide on how to complete the registration process through the BSE India portal.

Step 1: Access the Registration Portal

Visit the BSE India Membership Portal at https://membershipraia.bseindia.com/.

Step 2: Register as a New User

• On the portal, click on ‘Register’ to create a new account.
• Provide the required details to create your login credentials.
• Complete the registration to proceed.

Step 3: Login to the Portal

• Use your newly created credentials to log in to the portal.

Step 4: Start a New Application

• Once logged in, click on “New Application”.
• Select the appropriate Application Type and Entity Type from the drop-down menus.
• Proceed to start the application.

Step 5: Fill in Details Across 12 Tabs

The application form is divided into 12 tabs that you must complete.

Applicant Details Tab:

• Fill in the required information under the Applicant Details tab.
• Attach any necessary supporting documents.
• After completing the tab, click ‘Save & Draft’, then click ‘Save & Next’ to proceed. You will see a green tick indicating successful completion of the tab.

Address Details Tab:

• Complete the fields under the Address Details tab based on the address types selected from the dropdown.
• For each address type (e.g., Correspondence Address, Permanent Address), fill in the relevant details and click ‘Add’ after each entry.
• After filling in all address details, click ‘Next’ to move to the next tab.

Other Details Tab:

• Provide the necessary information under the Other Details tab and upload any required documents.
• Click ‘Save & Draft’ and ‘Save & Next’ to proceed.

Personnel Details Tab for Non-Individual Entity:

• If you are registering as a non-individual entity (Partnership, Body Corporate, or Company), provide personnel details under the Personnel Details tab.
• Add details for each type of personnel as required and upload relevant attachments.
• After completing this, click ‘Save & Draft’ and ‘Save & Next’.

Personnel Details Tab for Individual Entity:

• For individual entities, the process is similar to the non-individual entity. Fill in the relevant personnel details, add attachments, and proceed by clicking ‘Save & Draft’ followed by ‘Save & Next’.

Shareholder Details Tab:

• Under the Shareholder Details tab, provide information about major shareholders based on the selected options from the dropdown menu.
• Follow the steps similar to previous tabs and click ‘Save & Next’ when done.

Other Registration Details Tab:

• Complete the fields in the Other Registration Details tab, selecting "Yes" or "No" as applicable.
• After filling out the required fields, click ‘Save & Draft’ and ‘Save & Next’.

Infrastructure Facilities Tab:

• Enter the necessary details in the Infrastructure Facilities tab as per the dropdown options.
• Upload supporting documents and click ‘Save & Next’ to proceed.

Other Information Tab:

• Provide the required information in the Other Information tab, including “Yes” or “No” responses and the selection of your current Status.
• Click ‘Save & Next’ after completing the tab.

Change in Control Tab:

• If applicable, enter information regarding Change in Control in this tab.
• Attach necessary documents, click ‘Save & Draft’, and proceed with ‘Save & Next’.

Questions Tab:

• Fill in the necessary responses in the Questions tab, provide attachments, and click ‘Save & Draft’ followed by ‘Save & Next’.

Bank Details Tab:

• Provide your Bank Details in this tab.
• Add your primary bank account and select ‘Primary Bank Account Details (Default Bank)’ as the default.
• If needed, add secondary bank details by clicking ‘Add & Save’.
• Click ‘Save & Next’ to proceed.

Step 6: Declaration

• Read through the Declaration points carefully.
• After reviewing, click on the ‘I Agree’ checkbox and then click ‘Submit’ to complete your application submission.

Step 7: Application Status

• After submission, you can monitor the status of your application in the ‘My Application’ tab.
• This section will provide updates on the status of your application and other relevant details.

Post-Registration Compliance

After registration, investment advisors must comply with several ongoing requirements:

• Reporting: Regularly submit reports as specified by SEBI.
• Updates: Stay informed by frequently checking the SEBI website for updates, circulars, and guidelines.
• Material Changes: Notify SEBI of any significant changes to the information previously submitted.