compliance simplified

Informal Guidance – Waterfield Advisors

Query – 

(i) Whether Waterfield Financial & Investment Advisors Pvt. Ltd. (WFPL) clients can, at their own volition grant a Power of Attorney (POA) to: (a) make inquiries concerning the client’s account with the custodian (such as account balances, transaction details, etc.); and (b) liaise with the Client’s custodian and receive information from / transmit information to the custodian, in relation to the client’s investment decisions / client’s investment products; under the POA; at all times, after receiving the written consent and instructions from the client?

(ii) Whether the said arrangement between WFPL and its client whereby WFPL’s role, pursuant to the POA, is limited to the activities as set out in (i) above would be considered as ‘implementation services in terms of SEBI IA Regulations?

SEBI Response –

(i) Regulation 2(m) of SEBI (Investment Adviser) Regulations 2013 defines Investment Advisers as  “investment adviser” means any person, who for consideration, is engaged in the business of providing investment advice to clients or other persons or group of persons and includes any person who holds out himself as an investment adviser, by whatever name called; 

(ii) Thus, in terms of the IA Regulations, an IA is required to render investment advice to its clients and not manage funds or securities on behalf of its clients

(iii) Considering the scope of the activities allowed to an IA under the IA Regulations, as stated above, grant of a POA has neither been envisaged nor appears desirable for an IA

 

Note – emphasis added