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Investment advisers need credit report for SEBI approval: Reports

To provide advise to investors in financial products, investment advisors need to have a good credit report

October 15, 2012 4:48 IST | India Infoline News Service
Capital market regulator SEBI (Securities and Exchange Board of India) recently decided to frame guidelines for investment advisors, after consulting other regulators like RBI, IRDA and PFRDA.

To provide advise to investors in financial products, investment advisors need to have a good credit history. The move is aimed to protect the interest of investors in stocks and other capital market segments, according to media reports.

The SEBI board recommended a number of measures in its draft regulations, including the requirement of a credit report or score from CIBIL (Credit Information Bureau (India) Ltd), and details of the research facility to be submitted by the entities seeking to become investment advisors, the reports added.

The draft regulations required the entities seeking to get registered as investment advisors to submit details of their data processing capacity. Instead, they would now be required to submit details of their in-house and other research capabilities, the reports further added.

The investment advisors in their applications would be required to submit a credit report / score from the CIBIL. In the original draft regulations, the advisors were required to submit references from senior two bank officers.

The draft regulations were presented in August 2012; the final regulations would be notified soon after adding the proposed changes. The new regulations would now come into force three months after the regulator’s notification. These regulations make it mandatory for investment advisors to get registered with SEBI subject to certain exceptions, the reports concluded.


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