Securities And Exchange Board of India (SEBI) Chairperson, Madhabi Puri Buch, in her address at the Association of Registered Investment Advisers (ARIA) conference said that 35% of the investment adviser is unregistered in India.
She further stressed on not just adding more investment advisers to the ecosystem but also having them registered with the market regulator to ensure all compliance requirements.
The SEBI Chairperson, in her address, said that India needs to add at least 10 lakh investment advisers. Stressing on the distinction between the right and the wrong advisers, she emphasised that these investment advisers have to be registered with the market regulator. Additionally, these advisors should only provide investment advice and not trading calls.
Buch talked about instances of individual investment advisers running a big business with non-registered people, increasing the risk of spreading poor advice to investors.
She said, "SEBI officers have seen with their own eyes that one investment adviser with one registration running a 500-people call centre, a full-fledged business. I don't know how many people they drove to suicide."
As a part of the same address, Buch also said that the market regulator knows everything about the illegitimate practices of investment advisers. The SEBI Chairperson was referring to the illegitimate practices like running parallel Portfolio Management Services (PMS) or renting their registration certificates, instances of which have been very prevalent.
A recent study of SEBI’s orders against investment advisers showed how most investment advisers offered only equity derivative and speculative trading calls and tips. The study found that 51% of the orders were passed against entities from Indore, which is infamous for spam equity phone calls.
SEBI’s desire to have an addition of 10 lakh investment advisers also holds a lot of importance looking at how India is adding nearly two million trading accounts every month.
(Edited by : Sangam Singh)
First Published: Oct 4, 2023 6:18 PM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Odisha: Fight of heavyweights in Sambalpur where farmers, weavers hold the key
May 17, 2024 10:22 AM
Lok Sabha Election 2024: What rural Delhi wants
May 16, 2024 10:10 PM
Over 50 onion farmers detained in Nashik ahead of PM Modi's visit
May 16, 2024 11:14 AM
Why Google CEO is cautiously optimistic about the election year
May 16, 2024 9:51 AM