Context:
The Securities and Exchange Board of India (SEBI) has floated a consultation paper to ease compliance for Registered Investment Advisers (RIAs) and Research Analysts, addressing practical challenges in the existing framework. This comes after a decline in the number of RIAs from around 1,300 a few years ago to 967 at present.
Background:
- SEBI introduced fee-based advisory regulations in 2013.
- The RIA model struggled to expand due to high entry barriers and stringent compliance introduced in 2020.
- Reforms since January 2025 have gradually eased these norms.
Registered Investment Advisers (RIAs) and Research Analysts (RAs)
- To protect investors and ensure transparency, SEBI regulates investment advice and research services through two separate categories:
- Registered Investment Advisers (RIAs)
- Research Analysts (RAs)
- The aim is to curb conflict of interest, ensure professional standards, and promote investor protection in capital markets.
Registered Investment Advisers (RIAs)
- Individuals or entities registered with SEBI to provide investment advice to clients for a fee.
- Registration with SEBI is mandatory.
- Governed by SEBI (Investment Advisers) Regulations, 2013.
Research Analysts (RAs)
- Professionals/entities that prepare and publish research reports or stock recommendations on listed securities/companies.
- Registration with SEBI is mandatory.
- Governed by SEBI (Research Analysts) Regulations, 2014.
