Mumbai: The Securities and Exchange Board of India (Sebi) is weighing whether individual mutual fund distributors (MFDs) should also be allowed to hold a registered investment advisor (RIA) licence, as it reviews the regulatory framework governing distribution and investment advice, according to two people familiar with the matter.
“The working group is discussing whether individual MFDs should also be allowed to hold an investment adviser (IA) licence," said one of the two people on condition of anonymity.
It is one of several issues considered by the working group set up by the capital markets regulator earlier this year to streamline norms governing MFDs and RIAs. The group's recommendation would allow individual MFDs to hold dual licences, similar to those held by institutions and other non-individual entities, the person added.
The group was first mentioned by Sebi chairman Tuhin Kanta Pandey in March.
The review comes against the backdrop of a longstanding overlap between mutual fund distribution and investment advice. MFDs, who sell mutual fund products to investors and earn commissions from fund houses, also provide incidental advice on other financial products. However, the scope of such advice has not been clearly defined.