With regard to query at para 2, Regulation 22A of SEBI (Investment Advisers) Regulations, 2013 . Can a Trading Member receive Broking Income from Advisory Clients for execution services?
SEBI Response –
As per the provisions of Regulation 22A , an Investment Advisor may provide implementation services to the advisory clients in securities market . However, the client shall not be under any obligation to avail implementation services and thus, only after the advisory client has given consent to receiving implementation services in the securities market , Investment Advisor or group or family of Investment Advisor can provide implementation services. Further, the Investment advisor or group of Investment Advisor shall not charge any implementation fees from the advisory client.
Hence, a trading member or its group entity cannot receive any broking income from the advisory clients while providing execution services whenever such execution is emanating from advice offered by the trading member as Investment Advisor.
The informal guidance can be accessed here.
Note – emphasis added.