SEBI Board in its meeting held on December 16, 2020 had approved amendment to SEBI (Investment Advisers) Regulations, 2013 (IA Regulations), requiring IAs to seek membership of a separate body recognized by SEBI for administration and supervision.

SEBI vide its press release dated June 14, 2021, has declared that BSE Administration & Supervision Limited (BASL), a subsidiary of BSE has been granted recognition for administration and supervision of Investment Advisers.

1.      What will change for existing IAs?

All existing SEBI registered IAs shall be required to seek membership of BASL. That would essentially means dual membership.

2.      What will change for New IAs registration applicants?

New  applicants  shall  be  required  to  obtain  membership  of  BASL  before applying  for registration  with  SEBI  as  IA.  A  detailed  circular  in  this  regard  will  be  issued  by  SEBI, separately.

3.      What is the new Fee structure for IAs?

The fees payable to SEBI has been reduced by way of amendment to IA Regulations, with effect from April 01, 2021, so that there is no change in the total fees payable by IAs. 

Thus, the total fees payable by IAs (i.e. fee payable to SEBI plus fees payable to BASL) will be the same as that specified in IA Regulations, as applicable till March 31, 2021.

Please not that the existing IAs would not have to pay anything until the next renewal date i.e., 5 years from the IA registration/ last renewal date.

SEBI Fee structure as applicable: 

BASL Annual Membership Fee Structure:

4.     Additional details:

• Periodic reporting:

BASL members shall carryout the periodic reporting as may be called for and be required by BASL from time to time. Details of the same would be released by BASL vide separate circulars from time to time.

• SOP & FAQs:

The Standard Operating Procedure (SOP) for obtaining BASL’s membership and Frequently Asked Questions (FAQs) on the membership and other information in this regard are available on the websites of BASL (https://www.bseasl.com/ria/member.html) and BSE (https://www.bseindia.com/investor.html).

Same may be referred from below link:

http://csmeghakyal.in/2021/06/14/sop-on-bsal-membership-for-investment-advisors/

http://csmeghakyal.in/2021/06/14/faqs-on-bsal-membership-for-investment-advisors/

• Investors Grievances against RIAs:

New investor grievance and arbitrage mechanism has been introduced. Investor can lodge a complaint through email or through the facility provided on website under Investor section “e-Complaint Registration”. Additionally, investor can also lodge a complaint on SCORES, a web based centralized grievance redressal system of SEBI.

With a view to ensuring speedy and effective resolution of claims, differences and disputes between investor and RIA, BASL has laid down an Arbitration Mechanism. This mechanism is duly embodied in the Rules, Bye-laws and Regulations of BASL and duly approved by the Government of India/SEBI, under the Securities Contracts (Regulation) Act, 1956.

A detailed documents in this regard may be assessed from below links:

Investors Grievances against RIA- BASL Guidelines

http://csmeghakyal.in/2021/06/14/investors-grievances-against-ria-basl-guidelines/

Arbitration Mechanism for IA Complaints- BASL Guidelines

http://csmeghakyal.in/2021/06/14/arbitration-mechanism-for-ia-complaints-basl-guidelines/

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The introduction of first level regulator would change the regulatory landscape for IA’s. Now that the administration and supervision of IA’s would be through a separate entity all together, the compliance with provisions of IA regulations would become all the more important.

Detailed guideline, circulars and bye-laws are expected to be released by BASL and SEBI in due course of time. Only after that we would be in a position to access the regulatory change it would bring to the industry. For now, we can only speculate the outcome of this move, only time would tell the real implication of such move by SEBI.

Given the current scenario, we would once again recommend you to have a relook at the process of compliance followed by your organization and to be ready before the storms hits the shore.

As and when there are new information in this regard, we would try to disseminate the same to you for information and compliance.

For any query you can connect to us at +91 98197 28359 or email your queries to mail@csmeghakyal.in.

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