**Summary:**
This circular, reference number SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2021/632, issued by the Securities and Exchange Board of India (SEBI) on September 30, 2021, addresses the extension of timelines for Investment Advisers (IAs) to comply with certain regulatory requirements outlined in Circular No. SEBI/HO/IMD/DF1/CIR/P/2020/182, dated September 23, 2020.
Specifically, the circular extends the deadlines for IAs to conduct their annual compliance audit and obtain an annual certificate confirming client-level segregation, as mandated by the Investment Advisers Regulations, 2013. This extension is granted in response to representations from IAs citing difficulties arising from the COVID-19 pandemic.
For the financial year ending March 31, 2021, the revised deadlines are as follows:
* **Annual Compliance Audit:** The deadline to conduct the annual compliance audit is extended to December 31, 2021. The deadline to submit adverse findings of the audit, if any, is extended to January 31, 2022.
* **Annual Certificate for Client-Level Segregation:** The deadline for IAs to obtain the annual certificate from an auditor is extended to December 31, 2021.
All other requirements, terms, and conditions specified in the original circular remain unchanged.
This circular is issued under Section 11(1) of the Securities and Exchange Board of India Act, 1992, with the objective of protecting investor interests and promoting the development and regulation of the securities market. The circular is available on the SEBI website (www.sebi.gov.in) under the categories "Legal Framework/Circulars" and "Info for Investment Advisers."
For further information, contact Manaswini Mahapatra, General Manager, at 022-26449375 or via email at manaswinim@sebi.gov.in.
Key Entities Referenced
Securities and Exchange Board of India (SEBI): Regulatory body for the securities market in India.
Investment Advisers (IAs): Entities providing investment advice, regulated by SEBI.
SEBI Investment Advisers Regulations, 2013: Regulations governing the activities of Investment Advisers.
Circular No. SEBI/HO/IMD/DF1/CIR/P/2020/182: SEBI circular dated September 23, 2020, providing guidelines for Investment Advisers.
Securities and Exchange Board of India Act, 1992: Act of the Parliament of India that established SEBI.
Financial Year ending March 31, 2021: The financial year for which the timelines for compliance audit and certification are extended.
Regulation 22 of the IA Regulations: Specifies client level segregation requirements for Investment Advisers.
Manaswini Mahapatra: General Manager at SEBI, who issued the circular.
CIRCULAR
SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2021/632 September 30, 2021
All Investment Advisers
Sir / Madam
Subject: ‘Guidelines for Investment Advisers’ - Extension of timelines
1. “Guidelines for Investment Advisers” issued vide Circular No.
SEBI/HO/IMD/DF1/CIR/P/2020/182 dated September 23, 2020 (hereinafter referred as
“Circular”) inter alia prescribed timeline of six months from the end of each financial year for
Investment Advisers (IA) to conduct annual audit in respect of compliance of SEBI
(Investment Advisers) Regulations, 2013 (“IA Regulations”) and circulars issued thereunder.
Further, a timeline of one month from the date of the audit report but not later than October
31st of each year was prescribed for submitting adverse findings of such audit, if any, for the
previous financial year starting with the financial year ending March 31, 2021.
2. The Circular further specified a timeline of 6 months from the end of the financial year for the
IAs to obtain an annual certificate from an auditor confirming compliance with the client level
segregation requirements as specified in Regulation 22 of the IA Regulations.
3. SEBI is in receipt of representations from IAs requesting for extension of abovementioned
timelines prescribed for annual compliance audit and annual certificate confirming client level
segregation due to pandemic.
4. After due consideration, for financial year ending March 31, 2021, it has been decided to
extend the timeline for compliance with the aforesaid requirements by three months.
5. Accordingly, the Circular stands partially modified as under:
i. In accordance with clause 2 (vii) of the Circular, for financial year ending March 31, 2021,
the IAs shall conduct the annual compliance audit by December 31, 2021 and submit the
adverse findings of the audit, if any, by January 31, 2022.
ii. Further, in accordance with clause 2 (i) of the Circular, for financial year ending March 31,
2021, IA shall obtain a certificate from an auditor by December 31, 2021.
6. All other requirements, terms and conditions specified in the Circular shall remain unchanged.
1 | P age7. This circular is issued in exercise of powers conferred under Section 11(1) of the Securities
and Exchange Board of India Act, 1992 to protect the interests of investors in securities and
to promote the development of, and to regulate the securities market.
8. The circular is available on SEBI website at www.sebi.gov.in under the categories "Legal
framework - Circulars" and "Info for – Investment Advisers.”
Yours faithfully,
Manaswini Mahapatra
General Manager
Ph: 022-26449375
Email: manaswinim@sebi.gov.in
2 | P age