SEBI issues guidelines for usage of brand or trade name by advisors, analysts

SEBI has barred IAs and RAs from using its logo.

A day after issuing a comprehensive set of guidelines for advertisements issued by investment advisers (IAs) and research analysts (RA), the Securities and Exchange Board of India (SEBI) has now come out with a circular on the usage of brand names or trade names by these entities.

The capital markets regulator observed that few investment advisers and research analysts use the brand name/trade name/logo more prominently in their advertisements, websites, publications, correspondences with clients and various documents while marketing their services rather than their name as registered with SEBI.

Also read | SEBI brings in advertisement code for investment advisers, research analysts

“The brand name/trade name/logo may or may not be related to the name of IA/RA as registered with SEBI and hence may mislead and create confusion in the minds of the investors,” SEBI said in a circular dated April 6.

While investment advisers and research analysts can still use the brand name/trade name/logo, SEBI has issued some guidelines to ensure transparency.

Also read | Want to stop your MF SIP? Don’t wait until the last minute

“The information such as the name of the IA/RA as registered with SEBI, its logo, its registration number and its complete address with telephone numbers shall be prominently displayed on portal/web site, if any, notice board, display boards, advertisements, publications, know your client forms and client agreements,” SEBI said.

Further, the information such as the name of the IA/RA as registered with SEBI, its logo, its registration number, its complete address with telephone numbers, the name of the compliance officer, his telephone number and e-mail address, the name, telephone number and e-mail address of the grievance officer or the grievance redressal cell should be displayed prominently in statements or reports or any other form of correspondence with the client.

Also read | RBI rate hike pause brings relief to borrowers. But that could just be temporary

SEBI has also mandated the usage of the disclaimer, “Registration granted by SEBI, membership of BASL (in case of IAs) and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors”.

This disclaimer will now have to be mentioned on portal/web site, if any, notice boards, display boards, advertisements, publications, know your client forms, client agreements, statements or reports or any other form of correspondence with the client.

Meanwhile, SEBI has barred IAs and RAs from using its logo.

On April 5, SEBI barred IAs and RAs from using extensive technical/legal terminology or promising guarantee of assured return to the investors in their communications to further strengthen the code of conduct by IAs and RAs, while issuing advertisements.

Further, these entities have also been barred from using extensive technical or legal terminology or complex language and the inclusion of excessive details, which may distract the investors.

Additionally, they won’t be allowed to make any promise or guarantee of assured or risk free return to the investors and refer to past performance.