Markets regulator SEBI on September 28 came out with a new framework for investment advisers operating in international financial services centre (IFSC). Under the framework, any entity, being a company or a limited liability partnership (LLP) or any other similar structure recognised under the laws of its parent jurisdiction, desirous of operating in IFSC as an investment adviser (IA), may form a company or LLP to provide investment advisory services, Sebi said in a circular.
It further said the formation of a separate company or LLP will not be applicable in case the applicant is already a company or LLP in IFSC. According to Sebi, an IA or parent entity will fulfil the networth requirement, separately and independently, for each activity undertaken by it.
An IA will ensure to conduct annual audit in respect of compliance with investment adviser regulations and these guidelines from a chartered accountant from a company secretary. Sebi said persons seeking registration under the investment adviser norms would provide the services only to those persons mentioned in the IFSC guidelines.
"Further, IAs shall ensure to comply with the applicable guidelines issued by the relevant overseas regulator/ authority, while dealing with persons resident outside India and non-resident Indians seeking investment advisory services from them," Sebi noted. Earlier in January, Sebi had put in place guidelines for entities for operating as investment advisers in IFSC, under which such advisers need to have a net worth of at least $ 1.5 million.Now, the Securities and Exchange Board of India (Sebi) has amended its operating guidelines in this regard. The country's only IFSC is in GIFT-City near Ahmedabad in Gujarat.