April 16, 2024

A SEBI-Registered Investment Advisor should meet the minimum qualification and experience requirements, pass a certification examination, and adhere to strict regulations and ethical standards. Financial markets and investment instruments are getting more complex by the day. SEBI-Registered Investment Advisors provide expert advice on investment decisions. They also offer various services, including financial planning, investment management, retirement planning, and tax planning.  What is a SEBI-Registered Investment Advisor? The SEBI-Registered Investment Advisor meaning is a professional authorised and registered with the Securities and Exchange Board of India (SEBI) to provide financial advisory services to clients. A SEBI-Registered Investment Advisor must comply with the code of conduct, disclosure norms, and minimum qualifications and experience requirements set by SEBI.  The primary objective of a SEBI-Registered Investment Advisor is to offer unbiased and personalised investment advice to clients based on their financial goals, risk profile, and investment preferences. Investors can receive trustworthy and transparent advice from a SEBI-Registered Investment Advisor. Who needs to register as an Investment Advisor? In India, SEBI regulates the registration of Investment Advisors (IAs) under the SEBI (Investment Advisers) Regulations, 2013. The regulations define an investment advisor as someone who advises about investing in securities or provides research analysis. Any individual or entity that falls under the definition of an investment advisor must register with SEBI. This includes individuals, partnership firms, LLPs, companies, and any other entity that provides investment advisory services for a fee. Employees and representatives of investment advisory firms who interact with clients and provide advice should also be registered with SEBI. However, anyone engaged in incidental advice, such as a banker, chartered accountant, or insurance agent, is not required to register as an investment advisor. But, if such a person wishes to provide investment advice as a primary service, they can register with SEBI as an IA. SEBI regulations for a Registered Investment Adviser (RIA) Registration: RIAs must be registered with SEBI and meet minimum qualifications and experience requirements. They must also pass a certification examination.●    Fiduciary duty: RIAs must act in their client’s best interests and provide unbiased advice.●    Disclosure: RIAs should disclose all information about their investment products and services, including charges.●    Record-keeping: RIAs must maintain detailed records of all client transactions and interactions.●    Compliance: RIAs must comply with all SEBI regulations, including advertising and marketing, conflicts of interest, and client confidentiality. Eligibility criteria To be a registered RIA, one must have the following. ●    Minimum age of 21 years.●    Minimum five years of relevant experience.●    No prior convictions for any economic offence or violation of securities laws.●    A net worth of at least Rs. 1 lakh for individuals and Rs. 25 lakhs for non-individuals.●    Not a stockbroker or sub-broker, depository participant, or associated with one. Qualification The individual should have a minimum educational qualification of a graduate degree in finance, economics, or business administration or a professional qualification such as a CA, CFA, or MBA. They must also pass a certification examination conducted by NISM (National Institute of Securities Markets) or any other SEBI-recognized organisation. Registration as an Investment Advisor 1. Meet the eligibility criteria: You must have a relevant degree and work experience in related fields.2.    Passing the NISM certification exam: The NISM-Series-X-B: Investment Adviser (Level 1) certification exam is a stepping stone towards becoming an investment advisor.3.    Apply for SEBI registration: Apply to SEBI through Form A along with the necessary documents, including identification, qualifications, experience, CIBIL Score, net worth certificate, income tax returns, and an application fee.4.    Pay the application fee: You must pay Rs. 5,000 as the application fee.5.    Wait for SEBI approval: SEBI will review the application and may seek additional information if required.6.    Get registered: Once SEBI approves your application, you will be issued a registration certificate and can start offering advisory services.7.    Comply with regulations: You must comply with SEBI regulations and follow ethical standards while providing investment advice. What are the benefits of getting a SEBI-registered investment advisor? Credibility: Being registered with SEBI enhances your credibility as an investment advisor, as it shows that you have met the necessary standards and requirements set by the regulatory body.2.    Legal compliance: You must follow strict guidelines and comply with SEBI regulations, which help protect investors from unethical practices.3.    Business expansion: SEBI registration allows you to offer various services, such as portfolio management and financial planning, which can attract more clients and help expand your business.4.    Professional development: You must know the latest industry trends and regulatory changes.5.    Protection: SEBI provides a dispute resolution mechanism to help investors resolve conflicts with their advisors. Agreements between clients and RIA Agreements between clients and RIAs are crucial in clearly understanding the relationship between the two parties. These outline the terms and conditions of the services to be provided by the RIA, including the scope of services, fees, and the rights and responsibilities of both parties. The agreements may also cover the RIA’s investment philosophy, the client’s investment goals and risk tolerance, and the frequency of communication and reporting. It also includes provisions for terminating the agreement and resolving disputes between the parties. FAQs What is an investment adviser? An investment adviser is a professional or firm that provides advice or recommendations regarding securities investments for compensation. Why do I need to register as an investment adviser? Registration is typically required by regulatory authorities to ensure that investment advisers meet certain standards and regulations, protecting investors from fraud and ensuring transparency in the financial markets. Who needs to register as an investment adviser? In most jurisdictions, individuals or firms that provide investment advice as part of their business activities and meet certain thresholds, such as managing assets above a certain amount, are required to register as investment advisers. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR |

Stock investing and trading have become lucrative career options in India. Especially in the post covid period, India has seen a tremendous increase in the number of investors or and traders that have taken a plunge in the stock markets. While there are multiple investors and traders in the country, the number of stockbroker and sub brokers are relatively low. This creates a good career and business opportunity to become a stockbroker and a sub broker in India. Who is a stockbroker? A stockbroker can be a person or an entity that has the authority to purchase and sell securities on the recognized stock exchanges on behalf of the investors and traders. For this, the person or the entity has to first become a member of the recognized stock exchange after following the due process and paying the requisite fees. A person can also become a sub broker by working in a brokerage firm and acting on behalf of the trading member as their agent or otherwise.  What are the eligibility requirements to become a stockbroker? The applicant can be a person or any other organization (registered partnership firms, limited liability partnerships, corporations, companies, or institutions) The person has to be an Indian citizen of a minimum of 21 years of age. There is no limit on the maximum eligible age for being a stockbroker. The minimum educational qualification to be a stockbroker is having an HSC or its equivalent. Basic certification in either Securities Market (Basic) Module or Compliance Officers (Brokers) Module or relevant modules as per the required segment for membership of the Exchange. Capital Market (Dealers) Module Derivatives Market (Dealers) Module National Institute of Securities Markets (NISM) Series Derivatives Certification Examination The basic skills required by the applicants are, Analytical skills Communication and presentation skills Financial knowledge and good knowledge of computers Understanding of the stock markets and their movements Minimum experience of 2 years working as a partner, authorized assistant, or authorized clerk or apprentice to the member.  The Base Minimum Capital Deposit (BMC) required to be a stockbroker is tabled below. Category BMC  Only Proprietary trading without Algorithmic trading (Algo) 10,00,000 Trading only on behalf of Client (without proprietary trading) and without Algo 15,00,000 Proprietary trading and trading on behalf of Client without Algo 25,00,000 All Trading Members/Brokers with Algo 50,00,000 What are the documents needed to become a stockbroker in India? Along with the above-mentioned eligibility criteria, the applicants also have to submit the prescribed set of documents along with the application form. The required documents include A duly filled application form Basic details like the name and address of the applicant along with contact details, name of the trading firm, name of the stock exchange Documents asserting the type of organization like partnership deed, memorandum, and articles of association (in case of a non-individual) PAN of the applicant Educational qualifications of the applicant Certificate of registration or incorporation  Certificate of passing the required module MOU/ copy of the Contract Agreement entered with the clearing member in case where the applicant wants to clear and settle trades through such clearing member Recommendation from stock exchange Who cannot be a stockbroker in India? A person or an entity that has been adjudged bankrupt or insolvent. A person or an entity that has been convicted of any offense related to fraud or dishonesty. A person or an entity who has compounded with their creditors for less than the full discharge of debts. A person or an entity engaged as a principal or employee of any business other than securities except a broker or agent not involving any personal financial liability or for providing merchant banking, underwriting, or corporate or investment advisory services unless such ties are severed before admission as a member.  A person or an entity declared a defaulter or expelled by a recognized stock exchange or debarred from trading in Securities by SEBI or RBI or similar authorities or has been disqualified as per the provisions of Securities Contract (Regulations) Act, 1956 or Rules made thereunder.  If the membership application is rejected or disqualified by the registered stock exchange on grounds of it endangering public interest. What is the application process to become a stockbroker? The first step is to download the application form from the website of SEBI or by visiting its nearest office The next step is to submit the application form ‘Form A’ for Registration as Stockbrokers with SEBI along with all the required documents. If all the information provided is in order, the applicant will get an acknowledgment of their submitted application  The application form and the supporting documents will be examined for Board approval and SEBI certification following which the applicant will be issued an offer letter of temporary membership. The next step is the receive SEBI certification after further processing. Further, the applicant will have to submit the enablement documents to the membership department. The membership department will then provide access to the members on their trading system.  FAQs What are the fees for becoming a stockbroker in India? The fees applicable for becoming a stockbroker in India are-Application Processing Fees Rs. 10,000 (excluding taxes)-One time Admission Fees Rs. 5,00,000 excluding taxes for all segments except ‘Only Debt’Rs. 1,00,000 excluding taxes for the ‘Only Debt’ segment What is the minimum paid-up capital required by any company, or an institute to become a stockbroker in India? The minimum paid-up capital required by any company, or an institute to become a stockbroker in India is Rs. 30,00,000. What are the various categories of membership offered by an Exchange? he various categories of memberships offered by an exchange include -Trading member-Trading cum clearing member-Trading cum self-clearing member-Professional clearing member Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India