NOTE ON REGISTERED INVESTMENT ADVISOR (RIA)

SUB: NOTE ON REGISTERED INVESTMENT ADVISOR REGISTRATION

A) AN OVERVIEW:

A Registered Investment Advisor (RIA) is a person or firm who advises high-net-worth individuals on investments and manages their portfolios. RIAs have a fiduciary duty to their clients, which means they have a fundamental obligation to provide investment advice that always acts in their clients’ best interests. Simply a registered investment advisor (RIA) manages the assets of individual and institutional investors.

In case you wish to offer investment advice to your clients across multiple financial products, you need to be mandatorily registered under the IA Regulations by submitting the following application form to SEBI.

B) CAPITAL REQUIREMENTS:

Net Worth:(to be calculated as aggregate value of paid-up share capital + free reserves (excluding reserves created out of revaluation) reduced by the aggregate value of accumulated losses, deferred expenditure not written off, including miscellaneous expenses not written off, and capital adequacy requirement for other services offered by the advisers in accordancewith the applicable rules and regulations.

C) ELIGIBILITY CRITERIA:

• Minimum qualification for Individuals

2. A professional qualification or post-graduate degree or post graduate diploma in finance, Accountancy, business management, commerce, economics, capital market, banking,Insurance or actuarial science from a university or an institution recognized by the Central Government or any State Government or a recognized foreign university or  institution orAssociation; or
3. A graduate in any discipline with an experience of at least five years in activities relating toadvice in financial products or securities or fund or asset or portfolio management.

• Additional qualifications for individuals / partners / authorized representatives

Certification on financial planning or fund or asset or portfolio management or investment advisory services:

1. From NISM; or
2. From any other organization or institution including Financial Planning Standards Board India orany recognized stock exchange in India provided that such certification is accredited by NISM.

Currently, NISM has notified its new module NISM-Series X-A & X-B Investment Adviser (Level 1) & (Level 2) Certification Examinations for a person seeking registrations an Investment Adviser with SEBI.

1.NISM-Series X-A Investment Adviser (Level 1):

This certification aims to enhance the quality of investment advisory and related services in the financial services industry.

Examination structure: The examination consists of 100 questions of 1 mark each and should be completed in 2 hours. The passing score for the examination is 60%. There shall be negative marking of 25% of the marks assigned to a question for each wrong answer.

2. NISM-Series X-B Investment Adviser (Level 2)

NISM-Series-X-B: Investment Adviser (Level 2) Certification Examination along with the NISM-Series-X-A:Investment Adviser (Level 1) Certification Examination seeks to create a common minimum knowledge benchmark for all associated persons registered as an investment adviser and partners andrepresentatives of investment advisers under SEBI (Investment Advisers) Regulations, 2013 and offering investment advisory services.

An associated person shall be required to pass both the levels (i.e. NISM-Series-X-A: Investment Adviser (Level 1) Certification Examination and NISM-Series-X-B: Investment Adviser (Level 2) Certification Examination) to fulfill the requirements under Regulation 7(2) of the SEBI (Investment Advisers) Regulations, 2013.

Examination structure: Assessment Structure The examination consists of 8 caselets with 4multiple choice questions of 2 marks each per caseletand 36 multiple choice questions of 1 mark each adding up to 100 marks. The examination should becompleted in 2 hours. There is negative marking of 25% of the marks assigned to a question. The passingscore for the examination is 60 marks.

C) BUSINESS PLAN:

1. Proposed business plan & means of achieving the same.
2. The type of products/ securities on which investment advice is proposed to be rendered.
3. Process for risk profiling of the client and for assessing suitability of advice.

D) DETAILS OF INFRASTRUCTURE:

1. Details of office space, office equipment, furniture and fixtures, communication facilities, research capacity, research software for undertaking investment advisory services.
2. Declaration that the applicant has the necessary infrastructure to effectively discharge the activities of an investment adviser.

E) EXECUTION SERVICES:

1. 1. If the applicant is a body corporate, whether the applicant proposes to offer distribution or execution services to its clients.
   2. If yes, provide a declaration that the services are being offered through a subsidiary/ separately identifiable department or division.

F) OTHER INFORMATION/DECLARATIONS/ REGULATORY ACTIONS:

• Details of all settled and pending disputes in the last 5 years.
• Whether any previous application for grant of certificate made by any person directly or indirectly connected with the applicant has been rejected by the Board; If yes, provide details of the same.
• Whether any disciplinary action has been taken by the Board or any other regulatory authority against any person directly or indirectly connected with the applicant under the Act or the regulations made there under in the last 5 years. If yes, provide details of the action.
• Whether the applicant/directors/promoters/ partners have been indicted/involved in any economic offence in the last 5 years. If yes, provide details of the same.
• A credit report/ score from CIBIL for the applicant.(For applicants other than financial institutions & banking companies)
• Declaration that the applicant, its representatives and partners, if any, are fit and proper persons based on the criteria as specified in Schedule II of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008;
• Declaration that the applicant shall not obtain any consideration by way of remuneration or compensation or any other form whatsoever, from any person other than the client being advised, in respect of the underlying products or securities for which advice is provided to the client.
• Any other information considered relevant to the nature of services to be rendered by the applicant.

G) DOCUMENTS REQUIRED FOR REGISTERED INVESTMENT ADVISOR:

You have to submit the following documents (self attested) along with application in Form A.

1. Proof of Identity
2. Proof of address
3. Proof of qualification
4. Details of Ownership
5. Shareholding pattern/beneficial ownership pattern
6. Experience Certificate in case of graduates
7. CIBIL Score
8. Net worth certificate from a Chartered Accountant (should not be more than 6 months old)
9. Income Tax Returns for the last 3 years and copy of form 16 of last 3 years.
10. Various declarations as the case may be.

H)GRANT OF CERTIFICATE OF REGISTRATION:

SEBI shall take into account all the requirements as specified in the Regulations for the purpose of considering grant of registration. if registration subject to such terms and conditions as the Board may deem fit and appropriate.

I) RENEWAL OF REGISTRATION:

The certificate of registration remains valid for 5 years or till suspended. Investment Adviser has to apply for renewal of its registration certificate to SEBI, atleast 3 months before the expiry of the validity of the certificate, if it wishes to continue as a registered investment advice

PLACE OF RENDERING SERVICES.

The place of rendering services generally shall be our office situated at 2^nd Floor, 496/B, Om Apartment, Near KCC Classes, KasbaPeth, Pune – 411 011, Maharashtra, India.

​Pramodkumar R. Ladda 

Company Secretary & Insolvency Professional

Tel: +91-20-24570055 | Office Cell : +91- 9284293227, 9309845448, 8080051671 |

Personal Mob. : +91- 7972422151, 9595271145 |

Skype id: pramodladda

info@csladda.com | http;//www.csladda.com