SEBI Advisory on Brand Name Usage for Investment Advisers and Analysts

Advisory on Usage of Brand Names and Trade Names by Investment Advisers and Research Analysts

The Securities and Exchange Board of India (SEBI) has issued an advisory regarding the use of brand names, trade names, and logos by Investment Advisers (IAs) and Research Analysts (RAs) in their marketing practices. This advisory, effective from May 1, 2023, emphasizes the importance of clear communication and transparency in the disclosure of registered names.

Overview of the Advisory

On April 6, 2023, SEBI released Circular No. SEBI/HO/MIRSD/MIRSD-PoD-2/P/CIR/2023/52 addressing all registered IAs and RAs. The advisory highlights that some investment advisers and research analysts are prioritizing their brand names or logos over their legally registered names with SEBI, leading to potential confusion among investors.

Key Requirements

To ensure transparency and protect investor interests, the advisory specifies the following requirements for IAs and RAs:

1. Prominent Display of Registration Information:

   • Investment advisers and research analysts must prominently display their registered name, logo, registration number, complete address, and contact details on their websites, advertisements, publications, and client agreements.

2. Client Correspondence Standards:

   • In any correspondence with clients, they must include:
     • The registered name, logo, registration number, full address, and contact information.
     • The compliance officer's name, contact number, and email address.
     • Information for the grievance officer or grievance redressal cell.

3. Disclaimer Requirement:

   • A disclaimer must be included in all communications stating:
     • "Registration granted by SEBI, membership of BASL (for IAs), and certification from NISM do not guarantee performance or assurance of returns to investors."

4. Prohibition of SEBI Logo:

   • The usage of the SEBI logo by IAs and RAs is strictly prohibited.

Legal Basis

This advisory is issued under the authority of section 11(1) of the Securities and Exchange Board of India Act, 1992. Its purpose is to safeguard investor interests and regulate the securities market effectively.