IAS is defined and regulated by SEBI and entities offering these activities need to be registered with them. Banks cannot undertake IAS on their own. Banks may offer these services either through a separate subsidiary or one of the existing subsidiaries.
The sponsor bank should obtain prior
approval of Department of Banking Regulation before offering IAS.
All bank sponsored subsidiaries offering
IAS will be registered with SEBI and regulated as per the SEBI (Investment
Advisors) Regulations, 2013, and shall adhere to all relevant SEBI rules and
regulations in this regard.
IAS provided by the bank sponsored
subsidiaries should only be for the products and services in which banks are
permitted to deal in as per Banking Regulation Act, 1949.
The guidelines on KYC/AML/CFT applicable
to the subsidiary, may be adhered to in respect of customers to whom IAS is
being provided.
Banks which are
presently offering IAS may reorganize their operations in accordance with these
guidelines within three years from the date of issue of this circular.
Based on
RBI notification dated 21/04/2016. For any further clarification please refer www.rbi.org.in ……….Poppy
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