• 01 Mar 2025

SEBI-INVESTMENT ADVISER (REGISTRATION)

Abstract:

The Securities and Exchange Board of India (SEBI) plays a pivotal role in ensuring the integrity and transparency of financial markets in India. A critical aspect of this role is the regulation of investment advisory services through the SEBI Investment Adviser (IA) Registration framework. Established under the SEBI (Investment Advisers) Regulations, 2013, this regulatory structure aims to formalize the practice of providing investment advice, ensuring that advisers act in the best interests of investors while maintaining high ethical standards. This article provides an in-depth exploration of the SEBI IA registration process, examining the eligibility criteria, educational qualifications, and experience requirements for individuals and entities seeking to become registered investment advisers.

It also delves into the responsibilities and obligations imposed on registered IAs, such as maintaining independence, avoiding conflicts of interest, and adhering to the prescribed code of conduct. A significant focus of the article is on the regulatory obligations concerning disclosure norms, documentation, and client interactions. Further, it examines the compliance framework and the penalties for non-compliance, highlighting the importance of regular audits and reporting mechanisms.

The article also explores the broader implications of SEBI’s regulatory approach, emphasizing its role in protecting retail investors from fraudulent or unqualified advisory services, while fostering professionalism and trust within the advisory ecosystem. In addition, the article investigates the impact of technological advancements, such as digital platforms and robo-advisors, on the investment advisory industry in India. These innovations are not only enhancing accessibility but also creating new challenges for both regulators and advisers in ensuring transparency and unbiased advice.

By analysing the regulatory landscape and providing a comprehensive understanding of SEBI’s IA registration process, the article aims to inform aspiring investment advisers, financial professionals, and investors about the legal framework governing investment advice in India, while addressing future trends and the evolving dynamics of the advisory industry

WHO IS AN INVESTMENT ADVISER?

As per SEBI (INVESTMENT ADVISER) REGULATIONS 2013, 

“Investment adviser” means any person, who for consideration, is engaged in the business of providing investment advice to clients or other persons or group of persons and includes a person who holds out himself as an investment adviser, by whatever name called;

An investment adviser in India plays a crucial role in guiding individuals and institutions in making informed decisions about their investments. With the rapidly evolving financial markets and an increasing number of retail investors seeking professional advice, the role of investment advisers has become more important than ever. 

In India, investment advisers must be registered and regulated by the Securities and Exchange Board of India (SEBI), which ensures that these advisers meet specific qualifications, ethical standards, and financial criteria to provide trustworthy advice. The SEBI (Investment Advisers) Regulations, 2013, established a comprehensive framework for the registration and operation of investment advisers. 

These regulations require advisers to have adequate knowledge and experience in the securities market, as well as certifications from recognized bodies like the National Institute of Securities Markets (NISM). One of the key obligations of an investment adviser in India is to maintain a fiduciary duty, which means putting the interests of clients above their own, ensuring that the advice offered is unbiased and well-suited to the clients’ financial goals and risk profiles. Additionally, advisers must disclose any potential conflicts of interest, such as commissions or incentives received from third parties. This transparency is vital for building trust between advisers and clients.

With the rise of digital platforms, robo-advisors, and other technology-driven solutions, the landscape for investment advisory services is continuously evolving. As a result, SEBI has also been working to update its regulations to account for the impact of technology and ensure that these platforms also adhere to the same standards of transparency and professionalism. 

Ultimately, investment advisers in India serve as a bridge between complex financial products and retail investors, helping clients navigate the intricacies of the financial markets, optimize their portfolios, and achieve long-term financial security. The presence of a regulatory body like SEBI ensures that the advisory ecosystem remains professional, trustworthy, and accountable, fostering a more secure investment environment for all market participants.

 

WHAT ARE THE ELIGIBILITY CRITERIA’S/ REQUIREMENTS TO BECOME AN INVESTMENT ADVISOR?

Investment advisors in India must comply with specific regulatory requirements set by SEBI (Securities and Exchange Board of India). The following are the key criteria that an applicant must fulfill to obtain registration as an investment advisor:

1. If the Applicant is an Individual:

The applicant and all associated persons engaged in investment advisory services must possess the necessary qualifications and certification as prescribed under Regulation 7.

2. If the Applicant is a Body Corporate (Company/Firm):

The Principal Officer and all individuals associated with investment advisory services must hold the requisite qualifications and certification as per Regulation 7.

3. Deposit Requirements:

The applicant must fulfill the deposit requirements specified under Regulation 8.

4. Fit & Proper Criteria:

The applicant, its partners, the Principal Officer, and associated investment advisory personnel must meet the "Fit and Proper" criteria as outlined in Schedule II of SEBI (Intermediaries) Regulations, 2008.

5. Infrastructure Requirements:

The applicant must have adequate infrastructure to effectively provide investment advisory services.

6. Previous SEBI Certificate Rejection:

If the applicant or any directly/indirectly associated person has previously had an application for a certificate rejected by SEBI, the reasons for such rejection will be examined.

7. Disciplinary Actions Record:

If the applicant or any associated individual has been subject to disciplinary action by SEBI or any other regulatory authority, the details of such actions will be considered.

8. Special Provisions for Foreign Entities:

Any entity incorporated outside India that wishes to provide investment advisory services under these regulations must first establish a subsidiary in India. Only this subsidiary can apply for registration as an investment advisor.

Ensuring compliance with these regulations is crucial for securing SEBI registration as an investment advisor in India. Any discrepancies in meeting the criteria can lead to delays or rejections in the approval process.

 

WHAT ARE THE EDUCATIONAL QUALIFICATIONS REQUIRED?

An Individual Investment Adviser or Principal Officer of a Non-Individual Investment Adviser must possess the following minimum educational qualifications:

Minimum Educational Qualification:

• Professional Qualification, or
• Graduate Degree, or
• Post-Graduate Degree, or
• Post-Graduate Diploma (minimum 2-year duration)

Relevant Fields of Study:

• Finance
• Accountancy
• Business Management
• Commerce
• Economics
• Capital Market
• Banking
• Insurance
• Actuarial Science
• Other Financial Services (as specified by SEBI)

Recognized Institutions:

• A university/institution recognized by the Central or State Government of India, or
• A foreign recognized university/institution/association, or
• NISM (National Institute of Securities Markets) Post Graduate Program in Securities Market (Investment Advisory) (minimum 1-year duration), or
• CFA Charter awarded by the CFA Institute.

 

WHAT ARE THE CERTIFICATION REQUIREMENTS?

Any Individual Investment Adviser or Principal Officer of a Non-Individual Investment Adviser, as well as all individuals engaged in investment advisory services, must pass both of the following certification examinations:

1. NISM-Series-X-A: Investment Adviser (Level 1) Certification Examination
2. NISM-Series-X-B: Investment Adviser (Level 2) Certification Examination

IS THERE ANY EXPERIENCE REQUIRED?

After the December 2024 amendment, experience is no longer required to become an Investment Adviser (IA).

 Earlier, SEBI regulations mandated 5 years of experience, but this requirement has been removed following the December 2024 amendment.

 

IS THERE ANY NET-WORTH CRITERIA TO BE FULFILLED?

The net worth requirement has now been removed, and a new deposit criterion has been implemented under Regulation 8 of SEBI Amended Regulations.

This deposit will be marked as a lien in favor of the Investment Advisor Administration and Supervisory Body (IAASB). Currently, the responsibility of IAASB has been assigned to BSE Ltd.

 

WHAT IS THE FEES’ STRUCTURE TO GET REGISTERED AS AN INVESTMENT ADVISOR?

 

• Application Fees:

 

• Registration Fees:

 

• Renewal Fees:

HOW TO GET REGISTERED AS AN IA (INVESTMENT ADVISER)?

Let’s See the step-by-step process to get registered as an IA:

• Step 1: URL for registering as an Investment Adviser (IA) & Research Analyst (RA) membershipraia.bseindia.com
• Step 2: Registration as a New User 🡪 Click on ‘Register’. Create your login credentials and register yourself on BSE portal.

• Step 3: Complete registration process by verifying your mobile and email OTP.

For registration as an Investment Adviser, select type as IA and for registration as Research Analyst select type as RA.

• Step 4: Once the login is created you need to login into Portal using your credentials.

• Step 5: Click on “New Application” Select Application Type & Entity Type from the drop down as shown below and additionally select Applicant category for RA. 

• Step 6: All the Tabs as per “Form A” will be visible, now start filling details in all the 12 tabs one by one.

• Step 7: You will find below fields in Applicant Details Tab. Fill data in the field available under Applicant Details Tab and provide the needful attachments (Ensure that declarations are given on letterhead, duly signed, dated and less than 2 MB pdf file). On completion of filling the data click on Save & Draft and further Save & Next. Once you proceed to the next tab you will get a green tick         on the previous tab.

• Step 8: You will find below fields in Address Details Tab. Fill data in the field available under Address Details Tab as per “Address type” selected from below dropdown and provide the needful attachments (Ensure that declarations are given on letterhead, duly signed, dated and less than 2 MB pdf file). Once you fill the address for a particular address type for e.g. Correspondence address you need to click on ‘Add’ button towards the end of the page. Now proceed to fill the Address details for the next address type. Follow the same procedure for filling all the address types. Registered, correspondence, principal place of business and billing address are mandatory to fill. On completion of filling of all mandatory address type. Click on ‘Next’ and you will be redirected to next tab. 

• Step 9: You will find below fields in Other Details Tab. Fill data in the field available under Other Details Tab and provide the needful attachments (Ensure that declarations are given on letterhead, duly signed, dated and less than 2 MB pdf file). On completion of filling the data click on Save & Draft and further Save & Next. Once you proceed to the next tab you will get a green tick         on the previous tab.

• Step 10: A. Personnel Details for Non-Individual Entity.

You will find below fields in Personnel Details Tab. Fill data in the field available under Personnel Details Tab as per “Select type” selected from the below dropdown and provide the needful attachments (Ensure that declarations are given on letterhead, duly signed, dated and less than 2 MB pdf file). (For Entity type Partnership, Body corporate & Company). Similar to the process mentioned in point number 8 follow the steps to add the different types of Personnel Details. After which your need to upload attachments (Ensure that declarations are given on letterhead, duly signed, dated and less than 2 MB pdf file) and click on ‘Save as Draft’ and ‘Save & Next’ to proceed to the next tab.

• Step 10: B. Personnel Details for Individual Entity.

For entity type ‘Individual’:  You will find below fields in Personnel Details Tab. Fill data in the field available under Personnel Details Tab as per “Select type” selected from the below dropdown and provide the needful attachments (Ensure that declarations are given on letterhead, duly signed, dated and less than 2 MB pdf file). Similar to the process mentioned in point number 8 follow the steps to add the different types of Personnel Details. After which your need to upload attachments (Ensure that declarations are given on letterhead, duly signed, dated and less than 2 MB pdf file) and click on ‘Save as Draft’ and ‘Save & Next’ to proceed to the next tab.

• Step 11: You will find below fields in Share Holder Details Tab. Fill data in the field available under Share Holder Details Tab as per “Particulars of Major Shareholder Type” selected from below dropdown provide the needful attachments (Ensure that declarations are given on letterhead, duly signed, dated and less than 2 MB pdf file). Follow Steps mentioned in point number 8 and proceed with your filling.

• Step 12: You will find below fields in Other Registration Details Tab. Fill data in the field available under Other Registration Details Tab by selecting as per your details as whether “Yes or No” and provide the needful attachments (Ensure that declarations are given on letterhead, duly signed, dated and less than 2 MB pdf file). Click on ‘Save as Draft’ and further ‘ Save & Next’ .

• Step 13: You will find below fields in Infrastructure Facilities Tab. Fill data in the field available under Infrastructure Facilities Tab as per “Items” selected from below dropdown and provide the needful attachments (Ensure that declarations are given on letterhead, duly signed, dated and less than 2 MB pdf file).

Follow Steps mentioned in point number 8 and proceed with your filling.

• Step 14: You will find below fields in Other Information Tab. Fill data in the field available under Other Information Details Tab by selecting as per your details as whether “Yes or No” and “Status” selected from the below dropdown and provide needful attachments (Ensure that declarations are given on letterhead, duly signed, dated and less than 2 MB pdf file).

Follow Steps mentioned in point number 8 and proceed with your filling.

• Step 15: You will find below fields in Change in Control Tab. Fill needful data in the field available under Change in Control Tab by selecting as per your details whether “Yes or No” and provide needful attachments (Ensure that declarations are given on letterhead, duly signed, dated and less than 2 MB pdf file). Click on ‘Save as Draft’ and Further “Save & Next’.

• Step 16: You will find below fields in Questions Tab. Fill needful data in the field available under Questions Tab and provide the needful attachments (Ensure that declarations are given on letterhead, duly signed, dated and less than 2 MB pdf file). Click on ‘Save as Draft’ and Further “Save & Next’.

• Step 17: You will find below fields in Bank Details Tab. Fill needful data in the field available under Bank Details and provide the needful attachments (Ensure that declarations are given on letterhead, duly signed, dated and less than 2 MB pdf file). In the Primary bank account details select ‘Primary Bank Account Details (Default Bank)’ for the Default Bank selection. Click on ‘Add & Save ’button to add secondary/ next bank details and Further “Save & Next’ proceed to the next tab.

• Step 18: You will find below point of declaration under Declaration Tab. Read the declaration points 🡪 Click on “I Agree” checkbox and click in ‘Submit’ button to final submit the application. 

• Step 19: In the “My Application’ tab you may find the application status and other relevant details pertaining to your application. 

WHAT ALL LEGAL PAPERWORK IS REQUIRED ALONG?

1. Undertaking of moving compliance
2. Declaration for not being registered as Authorised Person with any Stock Exchange or with AMFI OR Declaration for relinquishment from AMFI or from Authorised Person ship.
3. : Declaration for Client Level Segregation of advisory and distribution activities (Regulation 2
4. Declaration for no ownership/ directorship/partnership interest.
5. Declaration regarding registration as an Investment Adviser
6. : Consent to use Aadhaar card copy.
7. : Declaration regarding Infrastructure.

FEES AN IA CAN CHARGE?

The maximum fee that may be charged by the IA under the fixed fee mode now stands revised and shall not exceed ₹1,51,000 per annum per family of client. The fee limit shall be revised and announced by IAASB once in three years based on the Cost Inflation Index (CII) after due consultation with SEBI.

In terms of the earlier provisions, IA could charge fees from a client under anyone mode, i.e., Assets under Advice (AUA) mode or fixed fee mode on an annual basis. Change of mode, if any, can be affected only after twelve months of on-boarding/last change of mode. In order to provide more flexibility in charging of fees, IAs have now been allowed to change the fee mode for a client at any time, without restriction on the minimum period between two fee mode changes. The maximum fee that can be charged by the IA shall, however, not exceed the higher of fee limit under the fixed fee mode or 2.5 per cent of AUA per annum per family of client.

CONCLUSION:

The process of registering as an Investment Adviser (IA) with the Securities and Exchange Board of India (SEBI) is an essential step for professionals looking to offer advisory services in the Indian financial market. SEBI’s regulatory framework ensures that advisers meet stringent standards of professionalism, transparency, and ethics, which ultimately safeguards the interests of investors. By registering with SEBI, IAs gain access to a recognized platform that instils trust and credibility with clients, while also adhering to a set of best practices that promote investor confidence.

The registration process itself requires careful attention to compliance, including meeting educational qualifications, passing required examinations, and fulfilling ongoing reporting and disclosure obligations. This not only enhances the quality of advisory services provided but also helps create a more organized and ethical financial advisory landscape. Furthermore, SEBI’s guidelines ensure that IAs act in the best interest of their clients, avoid conflicts of interest, and maintain high levels of transparency regarding fees and investment strategies.

As the Indian financial market continues to grow, the role of investment advisers becomes increasingly significant. By securing SEBI registration, advisers position themselves as trusted experts, contributing to the financial literacy and well-being of individual and institutional investors alike. It is important for IAs to stay informed of regulatory changes, ensure continuous professional development, and maintain adherence to SEBI's evolving standards to sustain their credibility and effectiveness in the ever-changing financial environment. Through these efforts, registered IAs will continue to play a crucial role in fostering a more informed, responsible, and efficient investment ecosystem in India.

DISCLAIMER

The contents in this article are just for informational purposes only. Efforts have been made to ensure the accuracy and reliability of information, the author(s) and publisher do not guarantee its completeness or precision. Any matter written in this article does not express the opinion of the author or the publisher. Additionally, it does not reflect the views of the organisation. Readers should self-analyse the information and perceive accordingly. The author(s), The publisher and the organisation are not responsible for any losses or damage occurring due to the interpretation of the article.