The Securities and Exchange Board of India is likely to launch a digital platform, SEBI SETU, this month to simplify registration and compliance for investment advisers (IAs), as it seeks to widen the country’s limited advisory base.
The initiative comes amid a surge in retail participation, with over 22 crore demat accounts, even as the number of registered investment advisers remains below 1,000, with fewer active participants.
SETU is expected to serve as a single-window interface, guiding applicants through the registration process and helping existing advisers navigate ongoing compliance requirements – areas that have often deterred professionals from entering the regulated space, according to sources aware of the discussions.
“It essentially is aimed at making the compliance process simpler and more navigable, especially for those who are currently outside the regulated framework,” a person familiar with the development said.
SEBI Chairman Tuhin Kanta Pandey had earlier said the platform is being developed to provide “simple and end-to-end regulatory guidance from registration to ongoing compliance for IAs”. The move follows a series of regulatory relaxations introduced over the past year to ease entry and reduce compliance burden for advisers and research analysts (RAs).
Easy transition
Among the changes, advisers can share past performance data with clients through one-to-one communication using standardised templates vetted by professionals from the Institute of Chartered Accountants of India or the Institute of Cost Accountants of India. This will be allowed for two years after the operationalisation of the Past Risk and Return Verification Agency (PaRRVA), sources said.
Advisers will also be allowed to offer second opinions on pre-distributed financial products, with fees linked to Assets Under Advice capped at 2.5 per cent annually, subject to disclosures and client consent. “To make the transition easy, individual advisers crossing regulatory thresholds may be allowed to continue onboarding clients,” a source said.
Eligibility norms have already been simplified, with any graduate eligible to register as an IA or RA, subject to certification from the National Institute of Securities Markets. Documentation requirements have also been reduced, with applicants no longer required to submit CIBIL reports or detailed asset-liability or infrastructure disclosures upfront.
With SETU, SEBI is looking to bring more advisers into the regulatory fold while making compliance less onerous for existing participants.