Sebi okays proposal to segregate investment advisory, distribution services

While an individual investment adviser will have no option of offering distribution services separately, corporate entity may have leeway as long as it keeps segregation at the client-level.

The Securities and Exchange Board of India (Sebi) on Monday approved the long-standing proposal to segregate investment advisory and distribution services. According to industry participants, big distributors may now have to re-work their business models.

From now on, an individual or a company will have to opt either providing advisory services or distribution services for investment products, such as mutual funds, portfolio management products, and alternative investment funds. This move may an industry-wide impact as several players at present dabble in both services. Earlier, the market regulator on four occasions had tried to segregate the two services but faced a