Henceforth, advisors will have to register with the capital markets regulator.
Further, the framework will help in regulating various investment advisory services, including independent financial advisors and bank distributors.
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A SEBI release stated "Banks or companies who offer distribution, execution or referral services will be required to offer investment advisory services through a subsidiary or a separately identifiable department or division (Sidd). Such a Sidd would have to be clearly segregated from other activities."
Ever since floating a concept paper on the same in 2011, SEBI had received 480 responses from financial advisors.
SEBI further added that only advice would come under the purview of these regulations, while the regulation of selling products, if any, would be under the purview of product regulators.
Also according to norms, investment advisors would obtain remuneration or compensation only from the client being advised.
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By GlobalDataThe regulations also provide for a code of conduct, fiduciary duties, record keeping and risk profiling of clients and also deal with the issue of suitability of the advice.
