Introduction
On June 27, 2025, the Securities and Exchange Board of India (SEBI) released the Master Circular for Investment Advisers (SEBI/HO/MIRSD‑MIRSD‑PoD/P/CIR/2025/94), the latest and most comprehensive set of guidelines for SEBI-registered Investment Advisers (IAs)
Aimed at simplifying regulations, this update consolidates all advisories issued until June 11, 2025, replacing the previous circular dated May 21, 2024, and establishing a single point of regulatory reference.
This blog unpacks the Master Circular’s key changes, practical implications, and what advisers and clients should keep an eye on.
📌 What’s New in 2025?
1. Consolidated Circulars till June 11, 2025
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Incorporates all SEBI guidelines, advisories, and directions for IAs issued up to June 11, 2025.
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Supersedes the earlier May 2024 circular, with backward-compatible provisions .
2. Rescission of Prior Guidance
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Prior circulars included in the Appendix are now rescinded.
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However, any prior actions, fees, applications, or legal proceedings under those circulars remain valid
3. Single Reference for Compliance
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SEBI intends this consolidated circular to serve as the sole compliance handbook for all IAs.
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A simplified one-stop regulatory roadmap with current expectations.
Key Highlights & Requirements
Detailed below is a summary of critical requirements, based on commentary and regulatory insights :
| Area | Requirements |
|---|---|
| Investor Charter Display | IA websites/apps must prominently feature the updated charter. |
| Grievance Disclosure | Monthly stats on complaints received/resolved must be published by 7th of following month. |
| Compliance Oversight | Appoint a qualified compliance officer/auditor; conduct annual audits; remediate findings. |
| Client Agreements | Coverage of fees, conflict of interest, confidentiality, service scope mandatory. |
| Risk Profiling & Suitability | Documented profiling and suitability assessments required before advice. |
| Fee Handling | Advance fees allowed up to 1 year with client agreement; no cash or part-payments. |
| Prohibited Practices | Free trials and unstructured engagements are expressly disallowed. |
| Record-Keeping & Audit | Maintain exhaustive client records; submit audit reports by Oct 31/audit completion. |
| Investor Protection Mandate | Reinforces SEBI's vision: transparency, investor-first governance, professional standards. |
Why It Matters
🛡 Investor Safety & Trust
Structured disclosures and grievance reporting build confidence.
Mandatory audit and compliance structures help prevent malpractice.
🔍 Regulatory Clarity
A unified, current circular reduces ambiguity and makes compliance more manageable.
Previously scattered guidance is now in one place.
🏛 Adviser Accountability
Defines clearer roles, responsibilities, and professional conduct for advisers.
Fosters discipline via fee rules and anti-free trial norms.
Practical Tips for Investment Advisers
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Review Corporate Website/App: Ensure Investor Charter and grievance stats are visible and updated.
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Formalize Compliance Teams: Appoint compliance officers or auditors with clear responsibilities.
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Update Client Agreements: Include all mandated clauses, especially around advance fees and risks.
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Standardize Risk Tools: Use documented profiling questionnaires and suitability templates.
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Enhance Record Management: Keep logs of advice, communications, and fees—ready for audits.
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Plan Audits Early: Begin internal audit prep before September to meet Oct 31 deadline.
Real-World Example
Consider “Alpha Advisors” (a hypothetical IA):
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Before Update: Low visibility of complaints, occasional cash collections, no formal audit.
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After Update:
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Published monthly complaint log on website.
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Shifted to NEFT for fee collection, with formal advance payment agreement.
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Conducted an annual compliance audit and submitted findings to SEBI.
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Result:
Improved investor trust, regulatory readiness, and operational discipline.
Conclusion
The SEBI Master Circular for Investment Advisers 2025 marks a significant stride toward a transparent, independent, and investor-centric advisory ecosystem. With key areas on compliance, governance, client engagement, and fee management now clearly outlined, advisers must proactively adjust workflows to align.
By embracing these updated norms, Investment Advisers can safeguard investors, boost their own credibility, and align with SEBI's vision for a robust securities market.
FAQs
Q1. When did the new Master Circular come into effect?
It was issued on June 27, 2025, consolidating SEBI guidelines till June 11, 2025
Q2. Does this circular void earlier guidelines?
Yes, but actions, applications, or proceedings prior to rescission remain valid
Q3. Can advisers still accept advance fees?
Yes—only if disclosed, agreed by client, collected via banking channels, and not in cash or part-payments.
Q4. Are free trials allowed?
No. The circular explicitly prohibits free trials or part-payments before formal agreement.
Q5. What are the key deadlines?
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Monthly grievance data: by 7th of next month
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Annual audit report: by October 31 or within one month post-audit
Keywords: SEBI Master Circular Investment Advisers 2025, SEBI IA compliance, Investment Adviser regulations, SEBI circular June 2025, IA audit requirements.
