New Delhi: Securities and Exchange Board of India (SEBI) has set up a working group to review the regulatory framework for mutual fund distributors (MFDs) and address overlaps between distributors and investment advisers (IAs), chairman Tuhin Kanta Pandey said on Monday.
Speaking at the ARIA Aspire 2026 event, Pandey said the market regulator is working to streamline rules and bring greater clarity in the roles of different financial intermediaries.
“The working group will examine existing regulations and suggest ways to reduce overlaps between mutual fund distributors and registered investment advisers,” he stated.
SEBI is also working on a common advertisement code for all intermediaries to make investor communication more consistent and reduce operational challenges across the industry.
The regulator is also preparing to launch a new digital platform called SEBI Setu, which will provide simple and end-to-end regulatory guidance to investment advisers.
“The platform is expected to help advisers better understand compliance requirements and make regulatory processes easier,” he stated.
In addition, SEBI plans to introduce a standardised and light-touch penalty framework for investment advisers to ease compliance burdens. The regulator is also simplifying the certification process conducted by the National Institute of Securities Markets (NISM) for people associated with investment advice, including those involved in sales and other non-core roles.
Pandey said these steps come at a time when the number of registered investment advisers in India has been declining. He described the trend as a matter of concern, especially as the country’s investor base continues to expand rapidly.
According to him, India currently has around 1,000 registered investment advisers, including about 470 individual advisers and nearly 530 non-individual entities.
Pandey warned that if the number of regulated advisers does not grow, the gap may be filled by unregulated voices, particularly financial influencers on social media.
He said many such “finfluencers” often present opinions as expert advice and speculation as investment strategy, which could mislead investors.
Citing SEBI’s investor survey, Pandey noted that nearly 62 per cent of prospective investors are influenced by finfluencers.
(IANS)
