Capital market regulator SEBI has allowed investment advisers and research analysts to charge one-year fees in advance, if agreed by the client. The decision was taken at the SEBI Board meeting held on Monday.
Earlier, IAs and RAs were allowed to charge advance fees for a maximum period of two quarters and one quarter, respectively.
Increasing the advance fee collection limit to one year from three months is expected to be a huge relief for research analysts who have been complaining that the norms, which were notified in January, would force them out of business and wind up operations.
The apex body for the segment, the Association of Registered Research Analysts of India, has also requested that SEBI to roll back the guidelines.
The SEBI board today also clarified that the fee-related provisions such as fee limit, modes of payment of fees, refund of fees, advance fee, and breakage fees shall only be applicable in the case of individual and HUF clients (not being accredited investors).
Thus, these conditions do not apply to non-individual clients, accredited investors, and in case of institutional investors seeking recommendation of proxy adviser. In such cases, fee-related terms and conditions will be governed through bilaterally negotiated contractual terms, it clarified.
