The Securities and Exchange Board of India (Sebi) has enabled investment advisers (IAS) and research analysts (race) to collect a maximum of one year in advance, Wednesday.
According to the existing rules, the investment advisers (IAS) can charge the reimbursements in advance for a maximum of two quarters if agreed by the customer, while for research analysts (race) it was only one quarter.
The relaxation comes after Sebi has received representations from RAS that expressed concern about the limitations that they do not invest in offering long -term recommendations. The rule had also led to some breed stores due to the increased costs and compliants.
“This is an important and positive step that recognizes the need of industry in flexibility when offering long-term research and advisory services. The relocation of SEBI ensures that analysts can concentrate on supplying high-quality, long-term investment entry without the limitations of short-term reimbursement cycli,” said pranit.
CURBS on advance costs
Sebi had introduced the limits for prior costs to protect investors against locking long -term payments for services that they may not find satisfactory. At the last meeting, the SEBI board approved the extension of the period after that were received by consultation, at its last meeting.
Sebi also clarified that cost -related provisions such as the reimbursement limit, payment methods of reimbursements, reimbursement of reimbursements, advance costs, break costs only apply in the case of their individual and Hindu customers of Family (HUF) and not accredited investors.
In the case of non-individual clients, accredited investors and in the case of institutional investors who request a recommendation from Proxy advisor, cost-related conditions will be controlled via bilaterally negotiated contractual conditions, the circular said.
