The Securities and Exchange Board of India (SEBI) issued a circular on April 6, 2023, outlining new guidelines for Investment Advisers (IA) and Research Analysts (RA) regarding the usage of brand names, trade names, and logos in their marketing materials and communications. The circular aims to promote transparency, avoid confusion among investors, and ensure compliance with regulations.
SEBI Circular dated 06/04/2023: New Brand Guidelines for Investment Advisers and Analysts
Prominent Use of Registered Name and Information
SEBI has observed that some investment advisers and research analysts have been using their brand names, trade names, or logos more prominently than their registered names in various marketing materials and communications. This practice may mislead or confuse investors, especially when the brand name or logo is not related to the IA/RA’s registered name with SEBI.
To maintain transparency and ensure investor clarity, the circular mandates that investment advisers and research analysts:
1. Display Registered Information Prominently
All IAs and RAs must prominently display their registered name, logo, registration number, and complete contact information on their websites, notice boards, display boards, advertisements, publications, Know Your Client (KYC) forms, and client agreements.
2. Provide Compliance and Grievance Officer Information
In addition to the registered information, IAs and RAs must also prominently display the name, telephone number, and email address of their compliance officer and grievance officer or grievance redressal cell in all statements, reports, or any other form of correspondence with clients.
3. Include a Disclaimer
A disclaimer stating, “Registration granted by SEBI, membership of BASL (in case of IAs) and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors” must be mentioned in all marketing materials, client communications, and agreements.
4. Prohibition of SEBI Logo Use
The circular explicitly prohibits the use of the SEBI logo by investment advisers and research analysts in any of their materials or communications.
Effective Date and Regulatory Authority
These guidelines will be applicable starting May 1, 2023. The circular is issued under the authority of Section 11(1) of the Securities and Exchange Board of India Act, 1992, which empowers SEBI to protect the interests of investors, promote the development of the securities market, and regulate the market accordingly.