SEBI allows investment advisors and accredited investors to mutually decide fees

Circular No. SEBI/HO/IMD/IMD-I DOF1/P/CIR/2021/694, Dated: 21.12.2021

The SEBI, through its earlier Circular No. SEBI/HO/IMD/DF1/CIR/P/2020/182 dated September 23, 2020, specified modes and limits of fees that can be charged by an Investment Adviser (IA) from a client. A partial amendment has been made to said circular allowing accredited investors and IAs to decide limits and modes of fees payable to the IAs through bilaterally negotiated contractual terms. An accredited investor is a person identified as such on basis of net worth or income.

In its earlier circular SEBI fixed the maximum fees that may be charged shall not exceed INR 1,25,000 per annum per client across all services offered by IA. A partial amendment has been made to said circular allowing accredited investors and IAs to decide limits and modes of fees payable to the IAs through bilaterally negotiated contractual terms.

Individuals, HUFs, family trusts, sole proprietorships, partnership firms, trusts, and body corporates can get accreditation based on financial parameters specified by the regulator, Subsidiaries of depositories and stock exchanges can issue an accreditation certificate to such investors.

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