Guidelines on Investment Advisory Services offered by Banks

As per this notification, Investment Advisory service is defined and regulated by Security and Exchange Board of India under the SEBI (Investment Advisors) Regulations, 2013, and entities offering these activities need to be registered with SEBI. As per the IAS Guidelines, banks cannot undertake IAS departmentally but banks desirous of offering these services may do so either through a separate subsidiary set up for the purpose or one of the existing subsidiaries after ensuring that there is an arm’s length relationship between the bank and the subsidiary. IAS provided by the Bank sponsored subsidiaries should only be for the product and services in which Banks are permitted to deal in as per Banking Regulation Act, 1949.

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