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SEBI cautions public against unregistered investment advisers

PTI New Delhi | Updated on November 29, 2018

Cautioning investors against exorbitant or assured returns, SEBI on Thursday asked public to deal with only registered investment advisers and pay advisory fees through banking channels only.

The move comes in the wake of several instances wherein investors got lured by false trading tips. The regulator has asked investors to ensure that the investment adviser has a valid registration certificate, Securities and Exchange Board of India (SEBI) said while issuing do’s and don’ts list for public while dealing with investment adviser.

Also, it asked people to assess the risk-return profile of the investment as well as the liquidity and safety aspects before making investments. “Pay only advisory fees to your investment adviser. Make payments of advisory fees through banking channels only and maintain duly signed receipts mentioning the details of your payments,” the regulator noted.

Besides, it has asked investors not to fall for the promise of exorbitant or assured returns by the investment advisers and “do not let greed overcome rational investment decisions and do not get carried away by luring advertisements or market rumours“. Also, it asked public to avoid doing transactions only on the basis of phone calls or messages from any investment adviser or its representatives. The regulator has asked not to deal with unregistered entities and do not fall for stock tips offered under the pretext of investment advice.

“Be vigilant in your transactions. Insist on getting the terms and conditions in writing duly signed and stamped. Read these terms and conditions carefully particularly regarding advisory fees, advisory plans, category of recommendations etc before dealing with any investment adviser,” SEBI noted. The regulator has asked investors to approach the appropriate authorities for redressal of grievances and also inform it about any investment advisers offering assured or guaranteed returns.

Published on November 29, 2018

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