SEBI Actions on Investment Advisors: Capital markets regulator Securities and Exchange Board of India (SEBI) on Thursday canceled the registration of 68 investment advisers for non-payment of renewal fees. “The certificates of registration of investment advisers vide Notice No. 1 to 68 under the Intermediaries Regulations, 2008 are cancelled,” said the order issued by SEBI’s designated authority Soma Majumdar.
SEBI’s strict action
The entities whose registrations have been canceled include companies and individual advisors like True North Labs Pvt Ltd, Equity Mantra, Saurabh Mundra, Sheetal Aggarwal, Atit Hemant Wagh, Gatebasis Securities and Technologies India Pvt Ltd, Lucid Technologies and Avenue Venture Partners Investment Advisors LLP.
As per SEBI’s Investment Advisor (IA) Regulations, every registered investment advisor is required to deposit renewal fees every five years from the date of grant of registration.
Action after show-cause notice
The regulator said that despite repeatedly informing these institutions about the expiry of the deadline, they did not pay the fee. Between February and June, SEBI had issued several show-cause notices to them. Since their certificate had already expired, SEBI considered cancellation of registration as a necessary step to avoid a situation of misusing the registration to mislead investors. Majumdar said in the order that the certificates of the noticeholders have already become inactive, hence their registrations are canceled under the Intermediaries Regulations, 2008.
On the other hand, SEBI has relaxed the educational qualification criteria for Investment Advisors (IA) and Research Analysts (RA). Now people who have graduated in any discipline will be able to apply for registration in both these categories. However, it will be mandatory to pass the certification examination of National Institute of Securities Markets (NISM) to maintain domain knowledge and professional competence.
Till now, for registration, applicants were required to have a graduate/post-graduate degree in finance-related fields like finance, business management, commerce, economics or capital markets. According to the new system, now graduate candidates from law, engineering or any other subject will also be eligible to become investment advisors and research analysts.
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