Sebi outlines measures to boost investment advisory ecosystem: Pandey
Mumbai, Mar 16, 2026
Sebi chief Tuhin Kanta Pandey says the regulator will review overlaps between mutual fund distributors and investment advisers and introduce a common advertisement code for intermediaries
The Securities and Exchange Board of India (Sebi) has set up a working group to review the regulatory framework governing mutual fund distributors (MFDs) and address overlaps between MFDs and investment advisers (IAs), chairman Tuhin Kanta Pandey said on Monday.
Speaking at ARIA Aspire 2026, Pandey said the regulator is also working on a common advertisement code for all intermediaries to reduce operational challenges and bring greater consistency in communication with investors.
The market regulator is also launching a digital platform—Sebi Setu—to provide simple, end-to-end regulatory guidance and compliance support for investment advisers.
Other measures aimed at easing compliance include a standardised, light-touch penalty framework for IAs and a simplified National Institute of Securities Markets (NISM) certification module for persons associated with investment advice, such as those engaged in sales and other non-core functions.
Sebi’s announcements come amid a declining number of registered investment advisers, a trend the chairman flagged as a concern.
“It is a matter of concern that the number of registered investment advisers has declined since 2021. As India’s investor base expands rapidly, our markets need more regulated advisers. Otherwise, the gap will be filled by unregulated voices—such as finfluencers—who present opinion as expertise and speculation as strategy,” Pandey said.
Currently, India has around 1,000 registered investment advisers, including about 470 individuals and 530 non-individual entities.
Pandey also pointed to a broader cultural challenge, noting that many investors still prefer ‘free’ recommendations, while the willingness to pay for professional financial advice is still evolving.
According to Sebi’s Investor Survey, nearly 62 per cent of prospective investors are influenced by finfluencers. Pandey warned that such influence can distort investor behaviour, weaken discipline, and erode trust in the financial ecosystem.
The Sebi chief also highlighted steps taken to attract more qualified professionals into the advisory business by relaxing eligibility criteria and documentation requirements.
He urged advisers to play a larger role in building a culture of responsible investing while embracing technology to improve efficiency and investor outreach.
“Advisers who combine technology with trust, knowledge with judgement, and efficiency with empathy will remain highly relevant,” Pandey said. “Embrace technology, but do not surrender judgement. In a world full of information, judgement becomes more valuable. In a world full of noise, trust becomes more valuable. And in a world of increasing automation, integrity becomes more valuable,” he added.
[The Business Standard]
