Questions Archives - Page 3 of 5 - Association of Registered Investment Advisers

Compliance Resource

Q.24: We have done our reporting entity registration on the Financial Intelligence unit portal and now we are proceeding for the Principal officer registration process but there is a drop down option to select but we don’t know what to select please assist us with the same.

Response: Select: “Principal Officer” for sure. Subsequently and optionally, if there is a necessity, you could add other users in your organisation like ‘Alternate Principal Officer’ or ‘Supervisor to Principal Officer’ or ‘Technical person’ or ‘Trainer’ or ‘Others’. Disclaimer: Information contained in the responses / answers to the queries posted to ARIA, and related notes […]

Q.23: If possible, can you share drafts of of various policies that are to be maintained by RIA, like AML, code of conduct, etc. We want to cross-check if the policies that we have drafted are complete or there are any points which still need to be included in it.

Response: The drafts of various policies that are to be maintained by RIA, like you mentioned are part of detailed consultative professional engagement. It may in-fact differ RIA to RIA. However, in case of any specific query – please do let us know. — Replied by: ARIA forum expert, CA. Sanjay Kadel (sk@sanjaykadel.com) Disclaimer: Information […]

Q.22: We are registered as a Corporate RIA, under my name, with SEBI. We wanted to understand 2 aspects –

What is FIU and is a registration there mandated by SEBI? If yes, how do we go about that? Currently, is BASL applicable to existing RIAs? Response to Sub-Query-1(a) FIU is an authority setup in India – technically referred as FIU-IND (Financial Intelligence Unit- India). This is in accordance to the Guidelines on Anti-Money Laundering […]

Q.21: I am an Individual RIA with my spouse in Distribution Business as a Pvt Ltd Company. I also have a 3% stake in the firm in addition to a third non related Owner. This is a disclosure in my initial application to SEBI.

There are couple of my clients who were using distribution services earlier (from the Pvt Ltd Company) and have not exited some investments (in Regular Mode) for various reasons like tax etc. No fees is being charged to them on Regular Mode assets. It’s also been mentioned in the Client Agreement. All new investments/switches have […]

Q. 20: For an individual RIA. can you please suggest simple step-by-step guidance for intimating to FIU-IND for appointment of Principal Officer?

Response: You have to follow the below-mentioned stages of registration and reporting: Stage-1: Reporting Entity Registration Stage-2: Principal Officer Registration Stage-1: Reporting Entity Registration Process The main-page link is: https://fiuindia.gov.in/ However, you may directly go to the ‘FINnet Portal’ link: https://finnet.gov.in/ Click on “Register New User” Click on “Register new Reporting Entity” Enter the basic […]

Q.19 : I am an individual RIA. My wife and son (both MBA) have passed NISM’s X-A and X-B exams. My understanding is they can be employed as persons associated with investment advice even though they don’t meet the experience criteria of –

(ii) an experience of at least two years in activities relating to advice in financial products or securities or fund or asset or portfolio management: Because it further says Provided that investment advisers registered under these regulations as on the date of commencement of these regulations shall ensure that the individual investment adviser or principal […]

Q.18: We are Equity Investment Advisors and have a query regarding interpretation of the following as mentioned in Section 15 (7) of SEBI regulations (also pointed in attached document for the same). It mentions the following:

‘An investment advisor shall not enter into transactions on its own account which is contrary to its advice given to clients for a period of fifteen days from the day of such advice.’ Provided that during the period of such fifteen days, if the investment adviser is of the opinion that the situation has changed, […]

Q.17 : Wanted to understand in case of blood relative of existing client like wife , mother ,father and HUF investments looking at investment advice can we

-Update their name in existing LOE of client and take KYC & risk tolerance as required or separate onboarding as client needs to be done. Response: Firstly, let us be clear on the ‘Family of client’ definition. According to Regulation 2(gb) of the IA Regulations: “Family of client” shall include individual client, dependent spouse, dependent […]

Q.16: We are reaching out to you regarding understanding compliance norms for our prospect clientele which is primarily based out of Uganda which I understand have additional surveillance and reporting requirements under PMLA Act as well as SEBI RIA requirements.

Our specific query was as follows: In terms of the fresh money, we wanted to understand the compliance norms and reporting requirements before accepting fresh funds. Our fresh investment recommendation to them were presently on the pause due to lack of clarity on the the above issues. Also, any other such rule and regulation that […]

Q.15 : Compliance Queries

Query-1: New Certificate – my SEBI registration was renewed in Apr’19 but haven’t got new certificate yet. There was confusion whether the old certificate has to be given to regional office / not to be given / sent to Bombay office etc. An year passed doing this and then lockdown in Mar’20. Most SEBI offices […]