SEBI Extends Time for IAs to Comply with Qualification Criteria

The Securities and Exchange Board of India (SEBI) has granted a two-year extension for investment advisers to comply with the enhanced qualification and experience requirements under Regulation 7(1) of SEBI (Investment Advisers) Regulations, 2013, as amended in 2020. Accordingly, the deadline to meet the said requirements has been extended to September 30, 2025.

Earlier, as per the 2013 regulations, an investment advisor registered under the regulations was mandated to either have the requisite educational qualifications (professional qualification or post-graduate education in finance, accountancy, etc.) or be a graduate in any discipline with experience of at least 5 years in activities relating to advice in financial products, or securities, fund, asset, or portfolio management.

Through an amendment in 2020, the Board tightened the criteria by providing that the investment advisors needed to have 5 years’ experience along with the prescribed educational qualifications. Further, a graduate from any discipline would not fit the criteria even if he has the relevant experience. The amended regulations also take away the exemption previously granted to partners and representatives of registered investment advisers, from obtaining a certificate of registration under Regulation 3. This exemption has, instead, been granted to principal officers of non-individual investment advisers and persons associated with investment advice who must comply with the criteria laid down under Regulation 7. Here, non-individual investment advisers are those with more than 150 clients.

The amendment pertaining to qualification and experience requirements under Regulation 7(1) was initially said to be operative from September 30, 2023. Acknowledging the emerging landscape of the domain of investment advice and considering the feedback received from various stakeholders, SEBI has decided to defer the implementation of said requirements.