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    Sebi Releases Framework For Advisory

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    By on Infra

    (T.E.T)

    Capital markets regulator Sebi on Tuesday came out with framework pertaining to fees for investment advisory services for accredited investors. Also, the regulator put in place guidelines on exit load charges applicable to the client of the portfolio manager.

    The Securities and Exchange Board of India (Sebi) in August introduced the concept of “accredited investor” in investment advisers (IA) and portfolio managers rules.

    In a circular, the regulator said that in case of accredited investors, the limits and modes of fees payable to the IA will be governed through bilaterally negotiated contractual terms
    In case of large value accredited investors, the quantum and manner of exit load applicable to the client of the portfolio manager will be governed through bilaterally negotiated contractual terms, Sebi said in a separate circular.
    Large value accredited investor means an accredited investor who has entered into an agreement with the portfolio manager for a minimum investment amount of Rs 10 crore.

    Under Sebi’s rule, a person or entity is identified as an accredited investor on the basis of net worth or income.

    Individuals, HUFs, family trusts, sole proprietorships, partnership firms, trusts and body corporates can get accreditation based on financial parameters specified by the regulator, Subsidiaries of depositories and stock exchanges can issue an accreditation certificate to such investors.

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