SEBI/HO/IMD/DF1/OW/P/32412/1 – November 26,2021


  1. Sicomoro Advisors Pvt Ltd (SAPL) proposes to provide implementation services to its advisory clients in accordance to Regulation 22A of the IA Regulations through the following products, collectively referred to as “Proposed Investment Products”
  • Investments in the unites of Alternative Investment Funds (AIFs)
  • Investments in Government Securities
  • Investments in private equity funds and venture capital funds that invest in securities
  • Investments in mutual funds investing in offshore jurisdictions
  • Investments in Corporate Deposits offered by corporates including Non Banking Financial Companies (NBFCs)
  1. Under the IA Regulations an investment adviser is permitted to provide advice in relation to, inter alia: (a) investing in, purchasing, selling or otherwise dealing in securities and investment products; and (b) investment portfolio containing securities and investment products

As stated in the application letter, SAPL can provide implementation services in all the products listed under the definition of the term securities under SCRA;

  1. As there are no direct schemes, plans or investment options available in India with respect to the “Proposed Investment Products” any consideration including commission or referral fees received by SAPL from any third party for providing implementation services would immediately be transferred to the clients, without any deductions, in any manner whatsoever (“Proposed Business”)
  2. Under the Proposed Business, SAPL proposes to provide Implementation Services in relation to Proposed Investment Products, by accepting the commission / fee from the issuer of such Proposed Investment Products and immediately providing credit for or remitting to the relevant clients the entire monetary benefit, and SAPL shall in no manner derive any benefit from such commission or fees for itself, or for its group companies, directly or indirectly.
  3. In view of the above SAPL has sought a no action letter under the scheme from SEBI confirming the following:
  4. The Proposed Investment Products Where Direct plan, scheme or option is not available, SAPL can provide advice and implementation services, in relation to the Proposed Investment Products.
  5. Whether the implementation services through Proposed Investment Products are permitted under Regulation 22A of the IA Regulations
  6. Whether the Prospective Business is in accordance with Regulation 22A of the IA Regulations



  1. With respect to the query at para 5 above, reference is drawn to para 2 (i) (h) of the SEBI circular dated September 23, 2020 which states as under

IA shall, wherever available, advice direct plans (non-commission based) of products only

  1. In view of the above, an investment adviser shall, inter alia, advice on direct plans where ever available while ensuring that the same is non commission based.
  2. Reference is further drawn to Regulation 22A of IA Regulations which provides for the following:

(1)  Investment  adviser  may  provide  implementation  services  to  the  advisory  clients  in securities market:

Provided  that  investment  advisers  shall ensure  that  no  consideration  including  any commission  or  referral  fees,  whether  embedded  or  indirect  or  otherwise,  by  whatever name called is  received; directly  or indirectly, at investment adviser’s group or family level for the said service, as the case maybe.

(2)  Investment adviser shall provide implementation services to its advisory clients only through direct schemes/products in the securities market.

(3)  Investment adviser  or  group or family  of investment adviser  shall  not  charge  any implementation fees from the client.

  1. As per Regulation 22 A (2) of IA Regulations, an IA can only provide implementation services in direct schemes/ products in securities market. Further in terms of the proviso to the Regulation 22 A (1) of the IA Regulations, an IA shall ensure that no consideration including commissions or referral fees whether embedded or indirect or otherwise, by whatsoever name called is received directly or indirectly, at investment adviser group or family level for the said service, as the case may be.
  2. In view of the submissions made by you, an IA providing implementation services with respect to products, where direct schemes / products are not available, irrespective of whether any consideration in any manner (commission, referral fee, etc.) is received by an IA, may amount to violation of the provisions of the IA Regulations.