Investment advisers can’t handle funds as properly as securities on behalf of their clientele and should really not contemplate about asking energy of lawyer in this regard, markets regulator Sebi has mentioned.
Such advisers can only provide investment advise to clientele, it added.
The clarifications have been provided as aspect of an informal guidance sought by Waterfield Financial and Investment Advisors with regards to investment advisers (IA) guidelines.
In its interpretative letter, the investment adviser asked Sebi whether or not its clientele can at their volition grant a energy of lawyer (PoA) to Waterfield authorising it to make enquiries regarding to the clients’ accounts with the custodian.
It, additional, sought guidance whether or not Waterfield can liaise with the clients’ custodian and acquire facts in relation to clientele investment choices, investment solutions below the PoA at all occasions following getting written consent and instruction from clientele.
It asked Sebi to clarify whether or not such services would be viewed as “implementation services” below the IA guidelines.
In its reply made public on Friday, the Securities and Exchange Board of India (Sebi) mentioned an IA is needed to render investment advise to its clientele and not handle funds or securities on behalf of the clientele below the IA Regulations.
Considering the scope of activities permitted to an investment adviser below the IA Regulations, “grant of a PoA has neither been envisaged nor appears desirable for an IA”, Sebi mentioned.
Noting this position is based on the facts furnished, Sebi mentioned, “different facts or conditions might lead to a different interpretation”.
“This letter does not express a decision of the board on the question referred,” the regulator added.