Investor Charter for Investment Advisers

परिपत्र / Circular SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/80 02-06-2025 To, All Investment Advisers Investment Adviser Administration and Supervisory Body (IAASB) Madam / Sir, Sub: Investor Charter for Investment Advisers 1. SEBI, vide Circular no. SEBI/HO/IMD/IMD-II CIS/P/CIR/2021/0686 dated December 13, 2021 (hereinafter mentioned as ‘Circular’) and Clause 8 of Master Circular for Investment Advisers dated May 21, 2024 (hereinafter mentioned as ‘Master Circular’), inter alia, issued Investor charter for Investment Advisers. 2. In a move to enhance financial consumer protection alongside enhanced financial inclusion and financial literacy and in view of the recent developments in the securities market including introduction of Online Dispute Resolution (ODR) platform and SCORES 2.0, it has been decided to modify the investor charter for Investment Advisers. 3. In view of the above and based on consultation with Industry Standards Forum (ISF) for Investment Advisers, updated investor charter for Investment Advisers is placed at Annexure A. 4. In this regard, BSE Limited (presently recognized as IAASB) is directed to advise Investment Advisers to bring the Investor Charter to the notice of their clients (existing as well as new clients) through disclosing the Investor Charter on their respective websites and mobile applications (if any), making them available at prominent places in the office, provide a copy of Investor Charter as a part of client on-boarding process, through e-mails/ letters etc. 5. Additionally, in order to ensure transparency in the Investor Grievance Redressal Mechanism, all the Investment Advisers shall continue to disclose on their respective websites and mobile applications (if any), the data on complaints received against them or Page 1 of 9against issues dealt by them and redressal thereof, latest by 7th of succeeding month, as per the format enclosed at Annexure ‘B’ to this circular. 6. The provisions of this circular shall come into force with immediate effect. 7. With the issuance of this circular, SEBI, Circular No. SEBI/HO/IMD/IMD-II CIS/P/CIR/2021/0686 dated December 13, 2021 stands rescinded and Clause 8 of Master Circular for Investment Advisers dated May 21, 2024 stands amended as per this circular. 8. This circular is issued in exercise of powers conferred under Section 11(1) of Chapter IV of the Securities and Exchange Board of India Act, 1992 read with Regulation 15(15) of the SEBI (Investment Advisers) Regulations, 2013 to protect the interests of investors in securities and to promote the development of, and to regulate the securities markets and shall come into effect from the date of this circular. 9. This circular is available on SEBI website at www.sebi.gov.in under the category: ‘Legal → Circulars भवदीय | Yours faithfully, आराधना वर्ा ा | Aradhana Verma र्हाप्रबंधक | General Manager दरू भाष | Telephone: +91-22-26449633 ईर्ेल | E-mail: aradhanad@sebi.gov.in Page 2 of 9ANNEXURE A INVESTOR CHARTER IN RESPECT OF IAs A. Vision and Mission Statements for investors  Vision Invest with knowledge & safety.  Mission Every investor should be able to invest in right investment products based on their needs, manage and monitor them to meet their goals, access reports and enjoy financial wellness. B. Details of business transacted by the Investment Adviser with respect to the investors  To enter into an agreement with the client providing all details including fee details, aspects of Conflict of interest disclosure and maintaining confidentiality of information.  To do a proper and unbiased risk – profiling and suitability assessment of the client.  To conduct audit annually.  To disclose the status of complaints on its website.  To disclose the name, proprietor name, type of registration, registration number, validity, complete address with telephone numbers and associated SEBI Office details (i.e. Head office/ regional/ local Office) on its website.  To employ only qualified and certified employees.  To deal with clients only from official number  To maintain records of interactions, with all clients including prospective clients (prior to onboarding), where any conversation related to advice has taken place.  To ensure that all advertisements are in adherence to the provisions of the Advertisement Code for Investment Advisers  Not to discriminate in terms of services provided, among clients opting for same/similar products/services offered by investment adviser. C. Details of services provided to investors (No Indicative Timelines)  Onboarding of Clients o Sharing of agreement copy o Completing KYC of clients  Disclosure to Clients o To provide full disclosure about its business, affiliations, compensation in the agreement. Page 3 of 9o To not access client’s accounts or holdings for offering advice. o To disclose the risk profile to the client. o To disclose any conflict of interest of the investment advisory activities with any other activities of the investment adviser. o To disclose the extent of use of Artificial Intelligence tools in providing investment advisory services.  To provide investment advice to the client based on the risk-profiling of the clients and suitability of the client.  To treat all advisory clients with honesty and integrity.  To make adequate disclosure to the investor of all material facts such as risks, obligations, costs, etc. relating to the products or securities advised by the adviser.  To provide clear guidance and adequate caution notice to clients when providing investment advice for dealing in complex and high-risk financial products/services.  To ensure confidentiality of information shared by clients unless such information is required to be provided in furtherance of discharging legal obligations or a client has provided specific consent to share such information.  To disclose the timelines for the various services provided by the investment adviser to clients and ensure adherence to the said timelines. D. Details of grievance redressal mechanism and how to access it 1. Investor can lodge complaint/grievance against Investment Adviser in the following ways: Mode of filing the complaint with investment adviser In case of any grievance / complaint, an investor may approach the concerned Investment Adviser who shall strive to redress the grievance immediately, but not later than 21 days of the receipt of the grievance. Mode of filing the complaint on SCORES or with Investment Adviser Administration and Supervisory Body (IAASB) i. SCORES 2.0 (a web based centralized grievance redressal system of SEBI for facilitating effective grievance redressal in time-bound manner) (https://scores.sebi.gov.in) Two level review for complaint/grievance against investment adviser:  First review done by designated body (IAASB) Page 4 of 9 Second review done by SEBI ii. Email to designated email ID of IAASB 2. If the Investor is not satisfied with the resolution provided by the Market Participants, then the Investor has the option to file the complaint/ grievance on SMARTODR platform for its resolution through online conciliation or arbitration. 3. With regard to physical complaints, investors may send their complaints to: Office of Investor Assistance and Education, Securities and Exchange Board of India, SEBI Bhavan, Plot No. C4-A, ‘G’ Block, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051 E. Rights of investors  Right to Privacy and Confidentiality  Right to Transparent Practices  Right to fair and Equitable Treatment  Right to Adequate Information  Right to Initial and Continuing Disclosure - Right to receive information about all the statutory and regulatory disclosures.  Right to Fair & True Advertisement  Right to Awareness about Service Parameters and Turnaround Times  Right to be informed of the timelines for each service  Right to be Heard and Satisfactory Grievance Redressal  Right to have timely redressal  Right to Suitability of the Financial Products  Right to Exit from Financial product or service in accordance with the terms of agreement with the investment adviser  Right to receive clear guidance and caution notice when dealing in Complex and High-Risk Financial Products and Services  Additional Rights to vulnerable consumers - Right to get access to services in a suitable manner even if differently abled  Right to provide feedback on the financial products and services used  Right against coercive, unfair, and one-sided clauses in financial agreements Page 5 of 9F. Expectations from the investors (Responsibilities of investors)  Do’s i. Always deal with SEBI registered Investment Advisers. ii. Ensure that the Investment Adviser has a valid registration certificate. iii. Check for SEBI registration number. Please refer to the list of all SEBI registered Investment Advisers which is available on SEBI website in the following link: https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&in tmId=13) iv. Pay only advisory fees to your Investment Adviser. Make payments of advisory fees through banking channels only and maintain duly signed receipts mentioning the details of your payments. You may make payment of advisory fees through Centralised Fee Collection Mechanism (CeFCoM) of IAASB if investment adviser has opted for the mechanism. v. Always ask for your risk profiling before accepting investment advice. Insist that Investment Adviser provides advisory strictly on the basis of your risk profiling and take into account available investment alternatives. vi. Ask all relevant questions and clear your doubts with your Investment Adviser before acting on advice. vii. Assess the risk–return profile of the investment as well as the liquidity and safety aspects before making investments. viii. Insist on getting the terms and conditions in writing duly signed and stamped. Read these terms and conditions carefully particularly regarding advisory fees, advisory plans, category of recommendations etc. before dealing with any Investment Adviser. ix. Be vigilant in your transactions. x. Approach the appropriate authorities for redressal of your doubts / grievances. xi. Inform SEBI about Investment Advisers offering assured or guaranteed returns. xii. Always be aware that you have the right to exit the service of an Investment Adviser xiii. Always be aware that you have the right to seek clarifications and clear guidance on advice xiv. Always be aware that you have the right to provide feedback to the Investment Adviser in respect of services received. xv. Always be aware that you will not be bound by any clause, prescribed by the investment adviser, which is contravening any regulatory provisions.  Don’ts i. Don’t fall for stock tips offered under the pretext of investment advice. ii. Do not provide funds for investment to the Investment Adviser. Page 6 of 9iii. Don’t fall for the promise of indicative or exorbitant or assured returns by the Investment Advisers. Don’t let greed overcome rational investment decisions. iv. Don’t fall prey to luring advertisements or market rumors. v. Avoid doing transactions only on the basis of phone calls or messages from any Investment adviser or its representatives. vi. Don’t take decisions just because of repeated messages and calls by Investment Advisers. vii. Do not fall prey to limited period discount or other incentive, gifts, etc. offered by Investment advisers. viii. Don’t rush into making investments that do not match your risk taking appetite and investment goals. ix. Do not share login credential and password of your trading, demat or bank accounts with the Investment Adviser. Page 7 of 9Annexure – B COMPLAINT DATA TO BE DISPLAYED BY IAs Formats for investors complaints data to be disclosed monthly by IAs on their website and mobile applications: Data for the month ending -_____________ Sr. Received Pending Received Resolved Total Pending Average No. from at the * Pending complaints Resolution end of # > 3months time^ (in last days) month 1 Directly from Investors 2 SEBI (SCORES ) 3 Other Sources (if any) Grand Total Number of complaints received during month against the IA due to impersonation by some other entity: Note: In case of any complaints received against the IA due to impersonation of the IA by some other entity, the IA may adjust the number of such complaints from total number of received/resolved complaints while preparing the above table. Further, IA must close such impersonation related complaints after following the due process as specified by SEBI/ IAASB. * Inclusive of complaints of previous months resolved in the current month. # Inclusive of complaints pending as on the last day of the month ^ Average Resolution time is the sum total of time taken to resolve each complaint in days, in the current month divided by total number of complaints resolved in the current month. Page 8 of 9Trend of monthly disposal of complaints Sr. Month Carried forward from Received Resolved* Pending# No. previous month 1 April, YYYY 2 May, YYYY 3 June, YYYY 4 …………….. 5 March, YYYY Grand Total * Inclusive of complaints of previous months resolved in the current month. # Inclusive of complaints pending as on the last day of the month Trend of annual disposal of complaints Sr. Year Carried forward from Received Resolved* Pending# No. previous year 1 2021-22 2 2022-23 3 2023-24 4 20XX-XX Grand Total * Inclusive of complaints of previous years resolved in the current year. # Inclusive of complaints pending as on the last day of the year Page 9 of 9