The market regulator has said that investment advisors can offer execution services to their customers, but they cannot charge any fees or commissions for this.
Market regulator Sebi has said that investment advisors can offer execution services to their customers, but they cannot charge any fees or commission for this. The Securities and Exchange Board of India (SEBI) also said that Investment Advisers cannot avail ‘reimbursement’ of any amount for services provided by Asset Management Companies (AMC) to their clients, whose schemes they Are selling to customers.
Paytm Money Ltd. with reference to SEBI’s Investment Advisory Rules. This explanation has been issued after seeking guidance from (PML). The PML said that at present, it is not charging any advisory fees or execution charges and is willing to pay for the expenses related to KYC (Know Your Customer), Technology Hosting, Platform Maintenance etc. from those AMCs whose plans (Direct Plan) she is selling.
Paytm Money Ltd. It was said that because of this, the cost is being borne by the company, if the investment was directly through AMC, then they (asset management company) would have to bear the cost. He had asked SEBI to clarify whether it would be a violation of investment advisory rules to compensate AMC for such expenditure.
The fee will depend on the investment adviser
Sebi said in its public response that investment advisors can provide execution services to their customers in the securities market. According to the regulator, however, it is up to the investment advisors to ensure that they do not charge commissions or charges for these services in any form directly or indirectly at the level of the investment consulting group or family.
SEBI said that such implementation services need to be made available in the securities market only through ‘direct schemes’ or products. The regulator clarified that its rules prohibit the investment advisor (IA) or its family members from taking any fees for implementation from its customers.
SEBI said that in view of this, PML cannot take any compensation for the services provided by AMC to its customers, whose direct plans it is selling.
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