Sebi to alter investment advisory norms for mutual fund distributors

Distributors fear proposed changes could hamper fund flow from small towns, cities

The Securities and Exchange Board of India (Sebi) may go ahead with tweaking its investment advisory guidelines for mutual fund (MF) distributors, even as it faces opposition from the latter.

In June, the markets regulator had proposed changes to the Sebi (Investment Advisers) Regulations, 2013, to prevent conflict of interest between “advising” and “selling” of investment products by the same entity or person.

As part of its proposals, an entity offering investment advisory services shall not be permitted to offer distribution/execution services. Banks, non-banking financial companies, and corporate bodies have to form separate subsidiaries to offer advisory