Recent changes in regulations have brought significant alterations for Registered Investment Advisors (RIAs). Here are the latest compliance updates issued by SEBI (Securities and Exchange Board of India), including periodic reporting formats, CKYC downloading consent, and more:
Here's a summary of the recent developments:
1. Periodic Reporting Format for Investment Advisers
· SEBI issued circular SEBI/HO/MIRSD/MIRSD-PoD-2/P/CIR/2024/38 dated May 07, 2024 prescribing a standardized periodic reporting format for submission of information by IAs pertaining to their activities on a periodic basis.
· Reports are required half-yearly, ending on September 30 and March 31 of every financial year.
· The format is specified in Annexure A of 2qthe circular, with submission deadlines outlined.
· It's recommended to collect data for the half-year ending March 31, 2024, in the specified format to avoid last-minute issues.
2. Framework for Administration and Supervision
· SEBI issued a circular SEBI/HO/MIRSD/MIRSD-SEC-3/P/CIR/2024/34 dated May 02, 2024 detailing the framework for the administration and supervision of Research Analysts and Investment Advisers.
· This circular is not expected to significantly impact Investment Advisers due to existing structures.
3. CKYC Downloading Consent
· CENTRAL KYC RECORDS REGISTRY (CKYCRR) vide its notification CKYC/2024-25/5016 dated April 01, 2024 instructed Reporting Entities to obtain consent from customers for downloading their CKYC records.
· Investment Advisers need to register with CKYCRR for KYC compliance and obtain consent before accessing customer records.
4. SCORES Portal Update - SCORES 2.0
· SEBI vide press release PR No. 06/2024 dated April 01, 2024 provided details of new version of SCORES, enhancing the investor complaint redress mechanism.
· Designated Bodies play a crucial role in the process, with reduced timelines for complaint resolution.
5. Display of Advertisement Approval Number
· BASL vide Circular 20240315-2 dated March 15, 2024 mandated the display of an Advertisement Approval Number in advertisements.
· Advertisements approved after March 15, 2024, should include this number.
6. SEBI Order for Cancellation of Registration
· SEBI cancelled the registration of an Investment Adviser due to various violations.
· List of primary violations is mentioned below:
i.Failure to comply with qualification and certification requirements,
ii.Failure to submit documents in respect of qualification requirement sought by SEBI
iii.Failure to follow proportionate fee structure
iv.Failure to follow the prescribed format of agreement
v.Failure to maintain proper records
vi.Failure to maintain proper client samples
vii.Promised assured returns, offered trial to prospective clients and charged part payment for providing services
7. Removal of Name from SEBI Registry on Non-payment of Renewal Fee
· SEBI has started removing names of registered intermediaries failing to pay renewal fees from its registry.
· Entities are advised to check their renewal status and prioritize payment to avoid accusations of engaging in unregistered activities.
ACTION POINTS
· Compliance: Ensure adherence to regulatory requirements outlined in the recent updates.
· Renewal: Check the status of renewal fees and prioritize payment to maintain registration status.
· Consent: Obtain consent from customers for downloading their CKYC records.
· Advertisement Approval: Display the Advertisement Approval Number in advertisements as per BASL guidelines.
· Reporting: Prepare and submit periodic reports as mandated by SEBI.
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