The Securities and Exchange Board of India (SEBI) has changed its rules so that investment advisers (IAs) and research analysts (RAs) can employ liquid mutual funds and overnight mutual funds to meet their required deposits. This new rule gives people another option besides the scheduled bank deposits that were required before.
The SEBI board agreed to add more deposit choices at its June 2025 meeting after hearing from industry members and holding public consultations. The revised rules were formally announced on August 6 and 7, 2017.
SEBI said in a circular on Tuesday that “In order to ensure compliance with the deposit requirements under the norms, IAs and RAs will now maintain a deposit in the form of units of a liquid mutual fund or an overnight mutual fund or as a deposit maintained with a scheduled bank.” This deposit will be marked as a lien in favor of either IAASB or RAASB, which are the relevant administration and supervision authorities.
By September 30, IAs and RAs must follow these new rules. The BSE, which is both the IAASB and RAASB, has been told to set up the systems and processes needed to support the new framework and let registered firms know about it.