Advisory Fees to be charged by IAs to its Clients including Accredited Investor: SEBI [Read Notification]

The Securities and Exchange Board of India (SEBI) has notified the advisory fees to be charged by Investment Advisers (IAs) to its clients including accredited investors.

The SEBI notified the Securities and Exchange Board of India (Investment Advisers) (Third Amendment) Regulations, 2021 which seeks to amend SEBI (Investment Advisers) Regulations, 2013.

In Regulation 15A, after the word “client” and before the word “in”, the words and symbol, “including an accredited investor” shall be inserted.

Earlier, IAs could charge fair and reasonable fees to the clients in lieu of providing advisory services. However, the term fair and reasonable was not defined or no ceiling limit was provided by SEBI regarding the same. There have been several complaints received by SEBI regarding unreasonable or exorbitant fees being charged by IAs. To restrain such instances and unfair practices, SEBI has inserted Regulation 15A regarding advisory fees that can be charged by IAs to its clients. It was already discussed under the consultation paper that IAs can either charge fees by opting for the Assets Under Advice (AUA) mechanism or they can charge fixed fees.

To Read the full text of the Notification CLICK HERE

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