Q.1 : Suppose a person has got registered as an Individual RIA and not commenced any business at all either because he has not fully made up his mind or kept it as an enabler should it be required in future, what are the obligations if any on him in terms of compliance, reporting, returns, etc. as there is no activity that has happened or expected to take place.

Response:

Even though a person has registered as RIA but has not done any related activities, the SEBI IA Regulations and SEBI IA Guidelines are applicable. Few instances of applicable compliances, are highlighted below:

1. Display of Details on website, stationery, etc. — Name of IA, Type of Regn., Contact details, SEBI office address, etc. as per Para 2(x) of the IA Guidelines.
2. IA Agreement compliance confirmation Report submission by 30th June 2021 – State: NIL clients.
3. Annual Compliance Audit Report – Submit to SEBI by 31st October 2021
4. Certification of client level segregation – Obtain and keep by 30th September 2021
5. Any change in Registered info – Inform SEBI
6. Qualification requirement to be ensured.
7. Experience requirement to be ensured.
8. Certification to be maintained at all times. Fresh certification must be obtained before expiry of the validity of the existing (usually 3 years validity).
9. Comply with New Networth requirements — Rs. 5 Lakhs in your case. The existing IA as on September 30, 2020 shall comply with the new Networth requirement within 3 years i.e. September 30, 2023.
10. Comply with SEBI PMLA Guidelines, as applicable – like Policies and Processes.
11. Intimate to FIU-IND, the Appointment of ‘Principal Officer’
12. Payment of SEBI Renewal Fee every 5 years (₹ 1,000 in your cases.)

—Replied by: ARIA forum expert, CA. Sanjay Kadel ( sk@sanjaykadel.com)

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