Stock exchange subsidiary to supervise RIAs

By Morningstar |  07-08-20 | 

With the growing number of RIAs, Securities and Exchange Board of India (SEBI) has invited applications from stock exchanges to administer and supervise Registered Investment Advisers.

Currently, there are 1,319 RIAs registered with SEBI.

A wholly-owned subsidiary of the stock exchange (stock exchange subsidiary) is eligible to administer and supervise IAs registered with SEBI.

Criteria for grant of certification:

  • Number of years of existence: Minimum 15 years
  • Stock exchanges having a minimum net worth of Rs 200 crore
  • Stock exchanges having nation-wide terminals
  • Investor grievance redressal mechanism including Arbitration
  • Capacity for investor service management gauged through reach of Investor Service Centers (ISCs)-Stock exchanges having ISCs in at least 20 cities

Responsibilities of subsidiary of a stock exchange:

  • Supervision of IAs including both on-site and offsite
  • Grievance redressal of clients and IAs
  • Administrative action including issuing warning and referring to SEBI for enforcement action
  • Monitoring activities of IAs by obtaining periodical reports
  • Submission of periodical reports to SEBI
  • Maintenance of database of IAs

The stock exchanges meeting SEBI’s criteria are required to submit a proposal to SEBI within 30 days.

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