SEBI has issued a Frequently Asked Questions (FAQs) on SEBI Registered Investment Advisers August 07, 2023. The FAQ clarifies that IAs are required to conduct annual audit in respect of compliance of the IA Regulations and circulars issued thereunder. The audit is required to be completed within six months from the end of each financial year. The adverse findings of the audit, if any, along with action taken thereof duly approved by the individual IA/ management of non-individual IA, is required to be reported to SEBI within a period of one month from the date of the audit report but not later than October 31st of each year for the previous financial year.
An IA is required to enter into an investment advisory agreement with its clients. An IA can include additional terms and conditions in the agreement without diluting the provisions of the IA and the circulars issued thereunder. An IA shall ensure that neither any investment advice is rendered nor any fee is charged until the client has signed the aforementioned agreement and provided a copy of the signed agreement to the client.
