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Investment advisers operating in an International Financial Services Centre must comply with SEBI Investment Adviser Regulations and specific operating guidelines. Companies or limited liability partnerships seeking registration must apply to the Board with the specified application fee. Partners and representatives offering investment advice must maintain prescribed professional qualifications, relevant experience, and certifications. The applicant must maintain a minimum net worth of USD 1.5 million. Investment advisers must conduct an annual compliance audit using a qualified professional.
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भारतीय प्रतिभूति और विनिमय बोर्ड Securities and Exchange Board of India
CIRCULAR
SEBI/HO/IMD/DF1/CIR/P/2020/04 January 09, 2020
All Investment Advisors
Sir / Madam
Subject: Operating Guidelines for Investment Advisers in International Financial Services Centre.
SEBI has issued SEBI (International Financial Services Centres) Guidelines, 2015 (hereinafter referred to as ‘IFSC Guidelines’) on March 27, 2015 for facilitating and regulating financial services relating to securities market in an IFSC set up under section 18(1) of Special Economic Zones Act, 2005. The IFSC Guidelines provide for a broad framework for operating of various intermediaries (including Investment Advisers) therein, as defined in Clause 2 (1) (g) of the IFSC Guidelines. Further, in terms of Clause 3 (1) of the IFSC Guidelines, SEBI can issue guidelines for any entity desirous of undertaking any other financial services relating to securities market.
Based on the representations received from various stakeholders, it has been decided to put in place ‘Operating Guidelines for Investment Advisers in IFSC’. The same is annexed herewith.
This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
The circular is available on SEBI website at www.sebi.gov.in under the categories “Info for – Investment Advisers” and "Legal framework - Circulars".
Yours faithfully,
Naveen Sharma General Manager Investment Management Department Ph: 022-26449709 Email: naveens@sebi.gov.in
Annexure
Operating Guidelines for Investment Advisers in International Financial Services Centre (IFSC)
The applicability of these operating guidelines is subject to such conditions that may be prescribed by the Board, Reserve Bank of India and other appropriate authority from time to time.
All provisions of the Investment Adviser Regulations, the guidelines and circulars issued thereunder, shall apply to Investment Advisers setting up/ operating in IFSC subject to the following paragraphs. Further, subsequent amendments in Investment Adviser Regulations, guidelines and circulars issued by SEBI for investment advisers shall be applicable to Investment Advisers in IFSC.
A. Registration of Investment Advisers for operating in IFSC
An application for grant of certificate of registration shall be made in accordance with the provisions of Chapter II of the Investment Adviser Regulations, accompanied by a non-refundable application fee as stated in para C of this Annexure.
The following persons shall be eligible to apply for an Investment Adviser Registration in IFSC to the Board:
Any entity, being a company or a limited liability partnership (LLP), which has the minimum prescribed net worth as specified below at the time of application can act as an Investment Adviser (IA) in the IFSC, in the following forms-
Explanation: “Foreign jurisdiction” shall be construed in accordance with Clause 2(1)(f) of SEBI (IFSC) Guidelines) 2015.
“Recognised entity” shall be construed in accordance with Clause 2(1)(j) of SEBI (IFSC) Guidelines) 2015.
Persons seeking registration under the Investment Adviser Regulations read with these Guidelines shall provide investment advisory services only to those persons referred in Clause 9 (3) of the IFSC Guidelines. Further, persons resident outside India and non-resident Indians seeking advice from IA in IFSC shall comply with the applicable guidelines issued by the relevant overseas regulator/ authority.
The Board may grant certificate if it is satisfied that the applicant fulfils the requirements as specified in the Investment Adviser Regulations read with these guidelines.
B. Compliance Requirements, Conditions and Restrictions
Partners and representatives of applicants referred to in para 3 offering investment advice shall have:
Partners and representatives of the applicants referred to in para 3 offering investment advice shall have, at all times, a certification on investment advisory services:
However, certification from NISM shall be mandatory for partners and representatives of applicants who offer investment advice in relation to Indian securities markets.
In case of applicants referred to in para 3, the net worth requirement shall be as under:
An IA shall ensure to conduct annual audit in respect of compliance with Investment Adviser Regulations and these guidelines from a chartered accountant or a company secretary or its equivalent under the laws in force of the country in which the applicant is registered or incorporated.
The conditions prescribed in Para 2 of Form A of First Schedule of Investment Adviser Regulations shall continue to apply, except for the following:
C. Amount to be paid as Fees
| Application fees | USD 750 |
| Registration fee for grant or renewal of certificate | USD 7,500 |
