Subscribe to enjoy similar stories. MUMBAI : Registered investment advisors (RIAs) can offer all kinds of products, including those not regulated by the Securities and Exchange Board of India (Sebi), and charge fees or receive commissions, said Sebi full-time member Kamlesh Varshney in an interaction with the Association of Registered Investment Advisors (ARIA) on Wednesday. Moreover, he said such fees should not be subject to Sebi caps, adding that there would not be any requirement to offer such products through a different entity, as Sebi had contemplated earlier.
However, Varshney clarified that RIAs should disclose the fee for non-Sebi products as a separate line item in their invoices. They must also get customers to sign a disclaimer or waiver that they will not be able to file complaints with Sebi for such products. He said the number of around 500 active RIAs in the country needs to rise significantly but declined to specify by how many.
To achieve this purpose, Sebi has proposed to lower eligibility criteria, scrap networth requirements, and ease fee regulation to attract more professionals to become RIAs and research analysts in an August consultation paper. However, products, such as insurance policies, the national pension system, taxation and wills, which are not regulated by Sebi, have been a sticking point. According to Varshney, all products can be classified into three baskets: those regulated by Sebi into basket 1, those under other regulators into basket 2, and those unregulated into basket 3.
RIAs can offer products in all three baskets, Varshney clarified in an answer to a question by Vivek Rege, former chairman of the ARIA. “Sebi has superbly navigated two conflicting objectives. First, it needed
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