SEBI issues guidelines for part-time RA and IA; and for dual registration as an IA and RA

Both will need to provide an undertaking that they will maintain an arms length relationship between their activities as an RA and and IA, said the circulars.

The market regulator issued guidelines for part-time research analysts (RAs) and part-time investment advisors (IAs), and for registration of an entity as both an RA and an IA.

These have come after the amendments made to the RA Regulations and IA Regulations on December 16, 2024.

According to circulars issued on January 8 by the Securities and Exchange Board of India (SEBI), a part-time IA or an RA is an individual or partnership firm who is also engaged in any other business activity/employment which is unrelated to securities and does not involve handling/ managing of money/ funds of client/ person or providing advice/ recommendation to any client/person in respect of any products/ assets for investment purposes.

Also read: Model portfolios by RAs must be performance validated, benchmarked to an index: SEBI

An applicant engaged in any activity or business or employment permitted by any financial sector regulator or an activity under the purview of statutory self regulatory organisations such as Institute of Chartered Accountants of India (‘ICAI’), Institute of Company Secretaries of India (ICSI), Institute of Cost Accountants of India (ICMAI) etc. shall be considered eligible for registration as part-time IA or RA.

Also, part-time IAs and RAs will be required to have similar qualification and certification requirements prescribed under relevant regulations for full-time IAs and RAs.

The circulars also stated that an IA may be registered as an RA and vice versa subject to terms and conditions.

Both will need to provide an undertaking that they will maintain an arms length relationship between their activities as an RA and and IA, and that they will shall ensure that the investment advisory services and research services are clearly segregated from each other.