Sebi Approves One-Year Advance Fee Limit

The Securities and Exchange Board of India (Sebi) has made a significant change to the fee structure for investment advisers (IAs) and research analysts (RAs). Now, they can charge advance fees for up to one year, a move aimed at addressing industry concerns and enhancing flexibility.

Understanding the New Fee Structure

Previously, IAs were limited to charging advance fees for two quarters, and RAs for one quarter. The new policy allows for a longer advance fee period, provided the client agrees, marking a shift towards more client-adviser flexibility.

Impact on Investors

Sebi Chairman Tuhin Kanta Pandey clarified that the updated compliance requirements, including fee limits and refund policies, will primarily affect individual clients and Hindu Undivided Families (HUFs). For others, terms will be based on negotiated agreements.

Support for Lower-Rated Debt Securities

In addition to fee changes, Sebi introduced measures to facilitate the issuance and trading of lower-rated debt securities, adjusting rules for Category II alternative investment funds (AIFs) to ensure compliance with investment requirements.