The Securities and Exchange Board of India in its recent circular dated 9th January 2020 has issued guidelines for entities operating as investment advisers in international financial service centre for facilitating and regulating financial services relating to securities market in an IFSC set up under the SEBI (International Financial Services Centre) Guidelines, 2015 and section 18(1) of Special Economic Zones Act, 2005 .
The decision has been taken following the representations received from various stakeholders. Under the framework, any recognized entity or entities desirous of operating in IFSC as an investment adviser (IA), may form a company or LLP to provide investment advisory services.
The operational guidelines for investment advisers in IFSC are as follows:
- All provisions of the investment adviser regulations, guidelines and circulars shall be applicable to Investment Advisers in IFSC.
- An application for grant of certificate of registration shall be made in accordance with the provisions of the Investment Adviser Regulations, accompanied by a non-refundable application fee.
- Persons seeking registration under the Investment Adviser Regulations shall provide investment advisory services only to those persons referred in IFSC guidelines. Further, persons resident outside India and non-resident Indians seeking advice from IA in IFSC shall comply with the applicable guidelines issued by the relevant overseas regulator or authority.
- The Board may grant certificate if it is satisfied that the applicant fulfills the requirements as specified in the Investment Adviser Regulations read with these guidelines.
- Every eligible person applying for Investment Adviser Registration in IFSC shall possess professional qualification or post graduate degree in finance , accountancy etc. and an experience of at least five years in activities relating to advice in financial products or securities, or fund/ asset/portfolio management, or investment advisory services
- An applicant shall have a net worth of not less than USD 1.5 million. In case the IA is set up as a subsidiary, the net worth requirement is to be met by the subsidiary itself. An IA shall ensure to conduct annual audit in respect of compliance with Investment Adviser Regulations.
Click here to read the Notification.