SEBI Relaxes Education Rules for Investment Advisers and Analysts
Why in the news
SEBI widened entry into advisory and research roles by dropping the finance-related degree requirement, while keeping the NISM test to maintain standards.
Key facts
- Any graduate can now apply to register as an IA or RA.
- Earlier, only candidates with finance, economics or related backgrounds qualified.
- NISM certification exam is still mandatory.
- IAs fall under SEBI (Investment Advisers) Regulations, 2013; RAs under SEBI (Research Analysts) Regulations, 2014.
| Feature | Investment Advisor | Research Analyst |
|---|---|---|
| Role | Personalised investment advice to clients | Research on securities, industries, markets; publishes reports |
| Client contact | Direct with individual or institutional clients | Mostly via published research; brokers, fund managers |
| Regulation | SEBI (Investment Advisers) Regulations, 2013 | SEBI (Research Analysts) Regulations, 2014 |
| Services | Portfolio planning, asset allocation, recommendations, risk management | Reports, ratings, target prices, sector and stock analysis |
| Earnings | Advisory or subscription fees, or % of assets; no brokerage or commission | Salary, consultancy or commission from reports; no personalised advice |
| Scope | Holistic, many asset classes | Specific securities or sectors; no end-to-end planning |
| Accountability | Liable for client losses if suitability norms breached | Liable for report accuracy; avoid conflicts |
Objective
- Encourage wider participation in advisory and research jobs.
- Balance inclusivity with competence through mandatory certification.
Exam angle
- Regulator: SEBI; exam body: NISM.
- IA cannot earn brokerage or commission; RA cannot give personalised advice.
- Aim: broaden talent pool, keep standards.