Regulation 34 - Investment advisers - International Financial Services Centres Authority (Capital Market Intermediaries) Regulations, 2025

34. Investment advisers (1) An investment adviser shall disclose to a prospective client, all material information about itself including its business, disciplinary history, the terms and conditions on which it offers advisory services, affiliations with other intermediaries and such other information so as to enable the client to take an informed decision on whether or not to avail its advisory services. (2) An investment adviser shall make the following disclosures to its clients: - (a) its holding or position, if any, in the financial products or securities which are subject matter of advice; (b) any potential or actual conflict of interest arising from any connection to or association with any issuer of products/securities; (c) all material facts relating to the key features of the products or securities, particularly performance track record; and (d) warnings, disclaimers in documents and advertising materials relating to an investment product which it is recommending to the client. (3) An investment adviser shall act in a fiduciary capacity towards its clients and shall disclose all conflicts of interest as and when they arise. (4) An investment adviser shall not receive any consideration by way of remuneration or compensation or in any other form from any person other than the client being advised, in respect of the underlying products or securities for which advice is provided. (5) An investment adviser shall maintain an arm s-length relationship between its activities as an investment adviser and its other activities. (6) An investment adviser shall not enter into transactions on its own account which is contrary to the advice given to its clients for a period of 15 days from the day of such advice: Provided that during the period of 15 days, if the investment adviser is of the opinion that the situation has changed, then it may enter into such a transaction on its own account after giving such revised assessment to the client at least 24 hours in advance of entering into such transaction. (7) An investment adviser shall not act on its own account, knowingly to sell securities or investment products to or purchase securities or investment products from a client. (8) An investment adviser shall ensure that, for the purposes of risk profiling, - (a) it obtains such information from the client as is necessary for the purpose of giving investment advice; (b) it has a process for assessing the risk a client is willing and able to take; (c) risk profile of the client is communicated to the client after completion of risk assessment; and (d) the information provided by clients and their risk assessment is updated periodically. (9) An investment adviser shall ensure that all investments on which investment advice is provided is suitable to the risk profile of the client and is consistent with the client s investment objectives and financial position. (10) An investment adviser shall have client level segregation for investment advisory and distribution services. (11) An investment adviser shall maintain an arm s length relationship between its activities as investment adviser and distributor by providing advisory services through a separately identifiable department or division, including separate manpower for conduct of these activities. (12) An investment adviser may provide implementation services to its advisory clients in securities market: Provided that the investment adviser shall ensure the following: (a) the potential conflicts of interest, if any, are adequately disclosed to its clients; and (b) the fee charged, if any, for the implementation services is pursuant to an agreement with its clients and disclosed in a transparent manner. (13) The client shall not be under any obligation to avail implementation services offered by the investment adviser.