SEBI has prepared a framework for investment advisory services
New Delhi:
Market regulator Securities and Exchange Commission of India (SEBI) has launched a framework regarding fees for investment advisory services for accredited investors.
In addition, it has also issued guidance on exit loading fees applicable to portfolio manager clients.
In August, SEBI introduced the concept of “accredited investor” in its investment advisor (IA) and portfolio management rules.
In a circular, the regulator said that in the case of accredited investors, the limits and method of fees payable to IAs would be governed through bilaterally negotiated contract terms.
In a separate circular, SEBI said that in the case of accredited investors of great value, the number and ways of exiting that apply to a portfolio manager’s clients will be regulated through the following conditions: contract terms are negotiated bilaterally.
High Value Accredited Investor means an accredited investor who has entered into an agreement with a portfolio manager for a minimum investment amount of Rs 10 crore.
According to SEBI norms, an individual or entity is defined as an accredited investor on the basis of net worth or income.
Individuals, Hindu Undivided Families, family trusts, sole proprietorships, partnerships, trusts and institutional companies may be accredited based on financial parameters. designated by the governing body. Subsidiaries of the depository and stock exchange may issue accreditation certificates to such investors.
