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Regulator Sebi today extended the deadline till July 31 for public comments on proposed norms on investment advisers, under which they will have to segregate their advisory and product distribution businesses.
The initial deadline was July 14.
"Based on the representations received from various bodies/associations seeking extension of the timeline to furnish the comments/suggestions, it has been decided to grant time till July 31, 2017 for submitting the comments on the consultation paper," Sebi said in a statement.
On June 22, the Securities and Exchange Board of India (Sebi) came out with a proposal to amend its norms for investment advisers, under which they will have to segregate their advisory and product distribution businesses even as their registration rules would be relaxed.
Besides, the regulator proposed to bring the ranking of mutual fund schemes under its ambit.
Also, it proposed to relax the educational qualification criteria for employees of registered investment advisers. The net-worth requirement and registration fee was also proposed to be reduced.
"To prevent the conflict of interest that exists between 'advising' of investment products and 'selling' of investment products by the same entity/person, there should be clear segregation between these two activities.
"...Entities engaged solely in the business of 'advising' on investment products shall not be permitted to sell any products to prevent conflict of interest," as per the proposal.
In addition, banks, NBFCs and various corporate bodies would have to set up a separate subsidiary for investment advisory services. Under current rules, such services can be provided through a separate division or department.
It proposed a time period of six months for such existing entities offering investment advisory services through separate department or division to set up a separate subsidiary.
With regard to mutual funds, Sebi proposed that distributors should not give any investment advice. They can only explain the features of MF schemes and can distribute suitable schemes to the investors describing material facts of the scheme and the associated risk factors.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)