Market regulator SEBI has launched a Centralized Fee Collection Mechanism (CeFCoM) for registered investment advisors (IAs) and research analysts (RAs). This mechanism has been launched on an optional basis. Under this, clients can make payments to investment advisors or research analysts on the portal of a recognized administrative and supervisory body (ASB) or on any designated platform.
The Securities and Exchange Board of India (SEBI) in a circular issued in this regard on September 13 said that BSE Ltd will inform about the operational framework for this mechanism before September 23, 2024 and after that CeFCoM will be implemented from October 1, 2024. The circular states that BSE Limited has prepared this mechanism in collaboration with several stakeholders.
The circular states that its objective is to help investors ensure that they are making payments to a registered advisor or analyst. According to the circular, “Due to the increasing interest in the securities market, investors need a mechanism to ascertain whether the payment being made on their behalf is being made to a registered investment advisor or research analyst.”
With the aim of creating a better and transparent payment ecosystem, SEBI has discussed with the concerned stakeholders regarding the creation of a separate centralized mechanism for fee collection. The regulator said that at present it is not mandatory to use this platform to collect fees through this mechanism and ASB should take steps to encourage the use of the service under it. In its circular, SEBI has requested investment advisors and research analysts to encourage clients to use this fee system.