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CS Professional · IFSCA - Regulations, Listing and Compliances · Capital Market Intermediaries

Meera Advisors, an IFSC-registered entity, receives fees from clients to give personalised recommendations on buying and selling listed securities, but it neither executes trades nor holds client assets. Another firm, Dev Brokers, executes client orders on the IFSC exchange and holds no advisory mandate. Which statement correctly classifies them?

Meera Advisors is an investment adviser because it gives paid personalised recommendations without executing trades or holding assets. Dev Brokers is a stock broker because it executes client orders on the exchange. Merchant banking and depository activities involve different functions and do not fit either firm.

  1. AMeera is an investment adviser and Dev is a stock brokerCorrect
  2. BMeera is a stock broker and Dev is an investment adviser
  3. CBoth are merchant bankers because both deal in securities
  4. DBoth are depository participants because both serve investors

Explanation

Giving paid, personalised recommendations without executing trades fits an investment adviser, while executing client orders on the exchange fits a stock broker. The swapped classification reverses the functions. Merchant banking concerns issue management and depository participation concerns custody, so neither applies.

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