Sebi Throws Open Doors for Professionals in Investment Advisory
In a landmark move that promises to democratize India's financial advisory landscape, the Securities and Exchange Board of India (Sebi) has removed significant entry barriers for aspiring investment professionals. The regulator has now permitted graduates from any academic discipline to register as investment advisers (IAs) and research analysts (RAs), effectively widening the talent pool for these critical, regulated roles.
Key Changes in Eligibility and Certification
This transformative shift, announced through official notifications on Tuesday, overturns the previous mandate that restricted eligibility to candidates holding finance-specific degrees like Finance, Business Management, Commerce, Economics, or Capital Markets. According to the new, more inclusive framework, graduates from diverse fields such as law and engineering can now enter the advisory space, provided they fulfill the stipulated certification requirements.
The revised regulations clearly state that applicants must possess a graduate degree or an equivalent qualification from any recognized university or institution, including foreign ones. Alternatively, holding a prestigious CFA Charter from the CFA Institute is also deemed acceptable. Crucially, all candidates must complement their academic credentials with the relevant NISM certification or a certification from an organization accredited by NISM.
Relaxed Corporatisation Norms for Individual Advisers
In another significant relaxation, Sebi has amended the corporatisation process for individual investment advisers. Under the new guidelines, when an adviser's business grows beyond the threshold of 300 clients or generates fees exceeding Rs 3 crore, they must immediately inform the regulator and initiate the transition to a non-individual entity, such as a corporate structure.
However, the transition period has been made more practical. The updated framework grants advisers three months to secure an in-principle approval from Sebi and an additional three months to finalize the conversion. Importantly, during this six-month window, the adviser is permitted to continue onboarding new clients and collecting fees, ensuring business continuity. This is a notable departure from the earlier rule, which mandated a complete shift to a corporate structure within a strict three-month period after breaching the limits.
These amendments to the norms for investment advisers and research analysts mark a strategic effort by Sebi to foster greater inclusivity and professionalism in India's rapidly growing financial markets, tapping into a broader base of skilled graduates.
