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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Key Regulations

Ms. Kavita Menon, an investment adviser, charges a fixed fee under the SEBI (Investment Advisers) Regulations. Which statement about fees is correct?

Registered investment advisers may charge fees either as a percentage of assets under advice or as a fixed fee, within the maximum ceiling per family per year set by SEBI. Profit-sharing or product-linked remuneration is not allowed under these modes.

  1. AShe can charge any fee mode, including a percentage of profit, without limit
  2. BFees may be charged in either assets under advice (AUA) mode or fixed fee mode, subject to the prescribed ceiling per family per yearCorrect
  3. CFees can be collected in advance for any period of more than two years
  4. DFees may be linked to the sale of specific products she recommends

Explanation

Advisers may charge fees under the AUA or fixed-fee mode, subject to a ceiling per family per annum prescribed by SEBI. Profit-linked fees are not permitted under these modes, and product-linked pay conflicts with the regulations. Advance fees are restricted in duration (not beyond a limited period).

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