SUMMARY
- SEBI’s new Centralized Fee Collection Mechanism facilitates fee payments through a designated platform.
- Designed to increase transparency and address issues with unregistered entities.
- BSE Ltd will set up the operational framework, with the mechanism starting on October 1.
The Securities and Exchange Board of India (SEBI) has introduced a new Centralized Fee Collection Mechanism aimed at enhancing transparency and efficiency in fee payments for Investment Advisers (IAs) and Research Analysts (RAs). Announced on Friday, this new system will allow clients to pay fees to their IAs and RAs through a designated platform managed by a recognized Administration and Supervisory Body (ASB).
This initiative addresses the increasing need for transparency and comes as a response to concerns over unregistered entities misleading investors. SEBI’s statement highlighted that these unregistered entities often present themselves as legitimate IAs and RAs, offering unrealistic returns and failing to comply with mandatory KYC and other regulatory requirements.
The BSE Ltd will outline the operational framework for this mechanism by September 23, with the system set to go live on October 1. The mechanism, although optional, aims to provide a clear distinction between registered and unregistered entities, benefiting both investors and legitimate advisors.
