#SEBI #InvestmentAdvisers #ResearchAnalysts #LiquidFunds #OvernightFunds #FinanceNews #MarketUpdate #InvestorProtection #MutualFunds #IndiaMarkets
Mumbai: In a move to provide more flexibility to market intermediaries, the Securities and Exchange Board of India (SEBI) has allowed Investment Advisers (IAs) and Research Analysts (RAs) to meet their deposit requirements using liquid and overnight mutual funds, in addition to fixed deposits (FDs) with scheduled banks.
Earlier, the deposit had to be maintained strictly in the form of a fixed deposit marked as a lien in favour of the respective supervisory bodies — the Investment Adviser Administration and Supervisory Body (IAASB) or the Research Analyst Administration and Supervisory Body (RAASB).
The required deposit amount is based on the number of clients handled by the IA or RA during the previous financial year. It ranges from ₹1 lakh for up to 150 clients to ₹10 lakh for those serving over 1,000 clients.
Broader Investment Options
With the latest change, IAs and RAs can now maintain their deposits in:
-
Fixed deposits with scheduled banks
-
Units of liquid mutual funds
-
Units of overnight mutual funds
These categories of mutual funds are considered among the safest in the market, offering high liquidity and low credit risk.
Industry Feedback and Implementation
SEBI’s decision follows public consultation, where several stakeholders suggested broadening the list of eligible instruments. The regulator has stated that the circular is effective immediately, and all IAs and RAs must comply by September 30, 2025.
Industry experts have welcomed the change, noting that it could improve liquidity management and potentially offer slightly higher returns than traditional fixed deposits. However, they have also cautioned that even liquid and overnight funds carry minimal market risks and should be chosen carefully.
Impact
The reform is expected to benefit both small and large advisory and research firms, allowing them to optimise returns on their mandated deposits while maintaining compliance and security.
#SEBI #InvestmentAdvisers #ResearchAnalysts #LiquidFunds #OvernightFunds #FinanceNews #MarketUpdate #InvestorProtection #MutualFunds #IndiaMarkets
