Capital market regulator Sebi has put out a consultation paper regarding advance fees that Research Analysts (RAs) and Investment Advisors (IAs) can charge from investors in return of services offered. The working documents also mention the refund amount that investors would get if they terminate contract mid way before expiry. Currently, RAs can collect fees 3 months in advance Currently, the market watchdog has allowed RAs to collect fees from clients in advance for a maximum period of three months. But, according to the consultation paper, the Sebi might increase this to 12 months. This Association in support of Sebi's proposal: One of the organisations which was involved in consultation rounds with Sebi, the Association of Registered Research Analysts (ARRAI) has fully come out in support of the above proposal. It said, “We support this proposal completely. It is a win-win situation for both investors and analysts." This would also lead to more long term stock recommendations than short term for investors. Currently, IAs can collect fees 6 months in advance: Same is the case with IAs. Currently, such organisations can charge up to six months fees in advance. The market watchdog may allow such organisations to expand the time limit to one whole year, as per the consultation paper. When it comes to refund of fees, if the investor cancels the contract mid way, then, IAs may have to make a refund to the client for the unexpired period. But three months' fees (out of total annual charges paid) would be deducted from the money to be returned back. Plus, the IA can also levy separate charges in the name of breakage fees to compensate for customer onboarding expenses. The capital market regulator has invited public review of the proposals. Post approval, these would be implemented in a time bound manner. What are RAs? RAs in India collect and analyse data to help businesses make strategic decisions. These may specialise in a particular field, such as finance or marketing. Services provided by RAs: What are IAs? IAs are professionals who provide financial advice to individuals helping them make informed investment decisions, and must be registered with the Sebi. Services provided by IAs:Original Article