SEBI Proposes 1-Year Advance Fee Collection for Research Analysts and Investment Advisors

In a major relief for SEBI-registered Research Analysts (RAs) and Investment Advisors (IAs), the Securities and Exchange Board of India (SEBI) has proposed allowing them to collect advance fees for up to a year.

Currently, advisors can charge fees for two quarters and analysts for one quarter, causing backlash and potential business shutdowns. 

The proposal, outlined in a consultation paper, follows industry representations arguing that the restriction hindered long-term recommendations and increased costs. 

SEBI acknowledged investor protection concerns by maintaining an annual fee cap and refund options. If implemented, this change would provide greater financial stability for RAs and IAs while ensuring compliance with investor safeguards.

Public Comments on the proposal are to be submitted by Feb 27.