The Securities and Exchange Board of India vide its circular dated 6th August 2020 has authorized wholly owned subsidiaries of the stock exchanges to administer and supervise IAs registered with SEBI.
As per Regulation 14 of the SEBI (Investment Advisers) Regulations 2013, SEBI can recognize any body/body corporate for the purpose of regulating IAs. It further provides that SEBI may, at the time of recognition of such body or body corporate, delegate administration and supervision of IAs to such body.
- The recognition of stock exchange’s subsidiary will be based on eligibility of parent entity.
- The parent entity should be in existence for a minimum of 15 years,
- The parent entity should have a minimum net worth of Rs 200 crore, should have nation-wide terminals as well as investor grievance redressal mechanism including arbitration and the stock exchange needs to have investor service centres (ISCs) in at least 20 cities.
- The Subsidiary of stock exchange shall supervise IAs, including both onsite and offsite, redress grievance of clients and IAs and take administrative action including issuing warning and reference to SEBI for enforcement action.
Further, the stock exchanges fulfilling these criteria may submit a detailed proposal incorporating requisite systems and mechanism to discharge responsibilities to SEBI within 30 days from the date of this circular.
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