An advisory firm from SEBI had sought advice on managing the funds of its client. In response to this, SEBI said that they cannot manage the fund of the investor nor can they seek power of attorney from them.
SEBI advises investment advisors
Market regulator Securities and Exchange Board of India (Sebi) has instructed investment advisors that they can only give advice to their clients. Cannot manage their funds or investments in shares. They do not have this right, so it is not right to ask for power of attorney from their clients. This was stated by SEBI as a response to a question asked by Waterfield Financial and Investment Advisory firm.
SEBI says that the job of investment advisors is only to advise their clients about investments, not to invest on their behalf. However, along with this, SEBI has also said in its clarification that its answer is based on the information given with the question and the rules can be interpreted differently in different facts or circumstances.
SEBI also said that an investment advisor should act keeping in view the scope of activities to be carried out under the IA rules. “The granting of POA is neither envisaged nor appears to be desirable for the IA.” SEBI said that this position is based on the information given. This letter does not express the decision of the Board on the question referred to.
Advisor firm had sought advice
Waterfield Financial and Investment Company had sought advice from SEBI on rules related to investment advisors. The advisory firm had asked whether its clients could voluntarily grant him a power of attorney so that he could inquire about their accounts on their behalf from the custodium. The company also asked whether they would be able to contact the custodian of their accounts on their behalf forever once they have obtained power of attorney and written permission and instructions from their clients regarding their investment decisions and investment products. Can I get information? SEBI has issued a form to answer these questions, although it was told that these guidelines are based on the questions asked. It is possible to change the rules in different cases.
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