SEBI Investment Advisory Services for Accredited Investors

Last updated: 22 December 2021

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The Securities and Exchange Board of India (SEBI) has introduced a framework for 'accredited investors' through amendments to the IA Regulations. For these investors, the fees charged by Investment Advisers (IAs) will now be determined by mutually agreed contractual terms, rather than the standard limits and modes previously specified. This change applies specifically to accredited investors, while other provisions remain in effect.

Securities and Exchange Board of India

CIRCULAR

No. SEBI/HO/IMD/IMD-I DOF1/P/CIR/2021/694

Dated: December 21, 2021

To
All Investment Advisers

Dear Sir / Madam,

Subject: Investment Advisory Services for Accredited Investors

1. The amendment to SEBI (Investment Advisers) Regulations, 2013 (“IA Regulations”) notified on August 03, 2021 (available at link), read with the Circular dated August 26, 2021 inter-alia introduced the concept/framework of “accredited investor” in IA Regulations.

2. Para 2(iii) of the SEBI Circular No. SEBI/HO/IMD/DF1/CIR/P/2020/182 dated September 23, 2020 (“Circular”) inter alia specifies the modes and limits of fees that can be charged by an Investment Adviser (IA) from a client. It has been decided that in case of accredited investors, the limits and modes of fees payable to the IA shall be governed through bilaterally negotiated contractual terms and the provisions of para 2(iii) of the Circular shall not be applicable. The other provisions of the Circular shall remain unchanged.

3. This circular is issued in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 and Regulation 29 of the Securities and Exchange Board of India (Investment Advisers) Regulations, 2013, to protect the interests of investors in securities and to promote the development of and to regulate the securities market.

4. The circular is available on SEBI website at www.sebi.gov.inunder the categories “Info for - Investment Advisers” and “Legal framework - Circulars”.

Yours faithfully,

Manaswini Mahapatra
General Manager
+91-22-26449375
manaswinim@sebi.gov.in

FAQ :

The circular concerns Investment Advisory Services for Accredited Investors and changes to fee structures.

The concept was introduced through an amendment to SEBI (Investment Advisers) Regulations, 2013, notified on August 03, 2021.

For accredited investors, fees are governed by bilaterally negotiated contractual terms between the investor and the Investment Adviser.

No, the previous limits and modes of fees specified in SEBI Circular No. SEBI/HO/IMD/DF1/CIR/P/2020/182 dated September 23, 2020, are not applicable to accredited investors.

No, the circular states that other provisions of the previous circular shall remain unchanged.