Sebi frames new norms for investor protection
Mkt regulator asks investment advisers, research analysts to display their info prominently in advertisements
Shareholders’ nod compulsory for appointing directors now
New Delhi: To bring more transparency, Sebi asked investment advisers and research analysts to prominently display information, including their name registered with the regulator, logo, registration number and complete address with telephone numbers, in their advertisements.
In addition, they have been asked to give the disclaimer that "registration granted by Sebi, membership of BSE Administration and Supervision Ltd (BASL) in case of IAs and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors" in their advertisements. This information should also be there in publications, Know Your Client (KYC) forms, client agreements, statements and in any other form of correspondence with the client. In addition, the regulator has prohibited them from using Sebi logo in their advertisements.
The latest move comes after the regulator observed that few investment advisers (IAs) and research analysts (RAs) are using the brand name or logo more prominently in their advertisements, websites, publications, correspondences with clients and various documents while marketing their services rather than their name as registered with Sebi. While IAs and RAs may use the brand name/logo, they need to ensure that the information such as name of the IA/RA as registered with Sebi, its logo, its registration number and its complete address with telephone numbers are prominently displayed on their websites, display boards, advertisements, publications, KYC forms and client agreements, according to a circular. Also, the compliance officer, his telephone number and e-mail address, the name, telephone number and e-mail address of the grievance officer should be displayed prominently in statements or reports or any other form of correspondence with the client. On Wednesday, the Securities and Exchange Board of India (Sebi) came out with an advertisement code for investment advisers and research analysts whereby they have been prohibited from issuing statements which may mislead investors as well as from using superlative terms and complex language in their advertisements. The new rules would come into force from May 1.
