SEBI Consultation Paper on mechanism for fee collection by SEBI registered Investment Advisers and Research Analysts


SEBI on August 25, 2023 has issued Consultation Paper on mechanism for fee collection by SEBI registered Investment Advisers and Research Analysts. It is proposed to bring in a separate mechanism for fee collection by IAs and RAs. Payment of fees to IAs and RAs through the proposed mechanism shall also provide clarity to investors regarding the registration status of the entity.

Fees shall be paid by clients on designated platforms to be specified/administered by a SEBI recognized supervisory body. IAs/RAs shall provide the details of the designated bank account/s in which fees shall be received through the proposed mechanism. These designated bank account/s shall be used solely for collection of fee from investment advisory/research activity.

The following disclosure shall be made by IAs and RAs to their clients:

All fee payments made by the client for investment advisory/ research services provided by the investment adviser/research analyst shall necessarily be through SEBI specified mechanism for fee collection. Any payment made outside the specified mechanism shall not be considered as payment towards investment advisory/research services under SEBI (Investment Advisers) Regulations, 2013/SEBI (Research Analysts)Regulations, 2014 and no grievances in this regard shall be entertained by SEBI recognized regulatory body or SEBI.

The public may send comments on the following:

  1. Whether the proposed mechanism for fee collection should be optional or mandatory for IAs and RAs.
  2. Whether creation and awareness of the proposed mechanism of fee collection will make investors more cautious in approaching unregistered entities for availing investment advisory/research services.
  3. Whether any additional information is required to be captured in the proposed mechanism for fee collection to make it more efficient and user friendly.

Comments may be forwarded in excel file by email to consultation latest by September 15, 2023.

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