Compliance Resources Archive - Page 5 of 6 - Association of Registered Investment Advisers

Compliance Resource

Q.12 : I am an individual RIA. I have 2 assistant financial planners who are Postgraduates and also have more than 4 years of experience in Financial planning. Since they are also involved in the planning process with clients and are also at the front end, can they send advice to clients?

Response: These 2 Asst. Financial planners will be considered as “Persons associated with investment advice” (‘PAIA’) according to Section 2(1)(r) of the IA Regulations. The PAIA should satisfy Qualification, Experience and Certification Requirements. Refer Regulation 7 of the IA Regulations — presented in the IA Compliances Referencer. Click here: Referencer pdf Quick Link to access. […]

Q.11 : I’m an individual RIA with no family members involved in distribution. In your compliance presentation you had mentioned that a ‘nil’ certification is recommended. My query is how do I get my auditor to sign of on this? What do I need to provide to him to prove this and what if the auditors of the family of IA are all different?

Response : The IA Guidelines mandate – the IA to get annual certificate from auditor confirming compliance with the client level segregation requirements as specified in Regulation 22. Regulation 22 — in connection to Individual RIA talks about 2 important points. (1) An individual IA shall not provide distribution services. You can prove this, by providing […]

Q.10: Let us assume there is a product called “A” in the market, which allows investors to invest only in regular mode as the company who has launched Product “A” has registered this product under regular mode with SEBI and not in direct mode.

1) Let us assume there is a product called “A” in the market, which allows investors to invest only in regular mode as the company who has launched Product “A” has registered this product under regular mode with SEBI and not in direct mode. 2) Investment Advisor named Z Pvt Ltd, who is a […]

Q.9 : Compliance Query – 1. Sample format end to end communication Sequence

2. Website Compulsory for Individuals RIA 3. Risk Assessment format 4. Suitability Format Response: The query seems to seek end-to-end compliance support, as applicable for RIA. Request you to refer the following, which will be helpful and also if required, you may seek professional compliance support. ARIA has already posted detailed IA COMPLIANCES REFERENCER […]

Q. 8 : We want to know if SEBI has given any specific date before we need to complete SEBI’s new requirement of quarterly report on SEBI sip portal.

Response: In SEBI SIP portal, the “Reports” menu contains Quarterly compliance report. This report seeks following details: — Details of Contact person; — Details of Advisory services Based on types of clients like Individual / Corporate and Resident / Non-Resident – No. of investors as at quarter-end; and Net Assets under Management with breakup of […]

Q. 7 : I have a few Clients who are NRIs and residents outside India. I advise them on investing in the Indian stock markets.Do they fall under the purview of SEBI Investment Adviser Regulations 2013? Do I have to sign Investment Agreements with them?

2.I have a few Clients who are NRIs, who are resident outside India. I advise them on investing in the US stock markets.Do they fall under the purview of SEBI Investment Adviser Regulations 2013? Do I have to sign Investment Agreements with them? 3.I have a few Clients who are foreign citizens but OCIs and […]

Q.6 : For an Individual RIA who does not have any employee, is it essential to register with CEERSAI CKYC? If so, how should the RIA go about it i.e. if they push their spouse to become a formal employee of the proprietorship, won’t this violate some other laws e.g. minimum wages to be paid to the spouse, and any other filings? Or should they just apply with an incomplete application form and let CERSAI reject the application?”.

Response: Brief Background: In India, CERSAI is authorized to perform the functions of CKYC Records Registry under PML Rules. As per the Rules, every ‘Reporting entity’ shall capture the KYC information for sharing with CKYC Registry or as the case may be, download the records based on KYC identifier submitted by the client. […]

Q. 5 : Can an INDIVIDUAL RIA share the office space with a Individual mutual fund distributor (MFD) common reception but separate work cabins for RIA and MFD, is it fine?

Response: Yes, you can share the office space, as mentioned. There is no restriction in law for common infrastructure sharing between RIA service provider and another MFD service provider. Remember: The law only says in Regulation (6) that necessary infrastructure should be there, to effectively discharge the activities of an investment adviser. Ensure strict confidentiality. Disclaimer: […]

Q. 4: I am an individual RIA. I wish to convert to a corporate RIA. I have been told that I can constitute a partnership with my wife and apply for a Firms RIA registration. SEBI takes Individuals & Partnership as one, hence I can save registration + BASL membership cost. Although net worth requirements will be like corporate RIA. I can also have an RIA practice & ARN as one partner may do RIA business & second can take MFD license.

Is this OK? Or I should aim to make a company/LLP & apply for Corporate RIAship. I wish to keep both businesses with client segregation as ok by SEBI regulations. Request your direction. Response: Clarity-1. Cost : You are right in saving cost by going for Partnership firm. In SEBI and BASL the fee structure is […]

Q.3 : We, a SEBI Registered partnership LLP firm, titles – Advantage Financial Planners LLP, FORMED IN 2013 and rest in 2014, have been following all compliance related since the beginning. HOWever, recent new rules, like issued in July 2020, need a carefully listed checklists. Hence it becomes necessary to have the right list and timing for submissions.

Please provide a complete list of all compliance related documents to be kept ready A calendar of month wise – what is to be submitted when Formats for these documents Link to respective websites Necessary precautions to be taken Response: ARIA has already posted detailed IA COMPLIANCES REFERENCER ver. 1.0 dt. 25-Apr-2021 (pdf document) authored […]