SEBI has issued a Consultation Paper on Advance Fee to be charged by Investment Advisers and Research Analysts. The objective is to seek comments from public on proposal to reconsider the period for advance fees, which the Investment Advisers (IAs) and Research Analysts (RAs) are currently able to charge their clients, and to consider advance fee period up to one year.
It is proposed to revise the provisions related to advance fees to provide that if agreed by the client, IAs and RAs may charge fees in advance, however, such advance shall not exceed fees for a period of one year. The compliance by IAs and RAs to the fee related provisions viz. fee limit, modes of payment of fees, refund of fees, advance fee, breakage fees shall only be applicable in case of their individual and HUF clients. In case of non-individual clients, accredited investors, and in case of institutional investors seeking recommendation of proxy adviser, fee related terms and conditions shall be governed through bilaterally negotiated contractual terms.
Comments are invited on the proposals mentioned in the consultation paper. The comments/ suggestions should be submitted latest by February 27, 2025.
