Saturday, April 30, 2016

Guidelines on Investment Advisory Services (IAS) offered by Banks

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 ……….Poppy