In a move that could effectively bar registered investment advisors from offering any unregulated advice on new-age asset classes like cryptocurrencies, non-fungible tokens NFTs and digital gold, the capital markets regulator has said that investment advisors can't deal with unregulated products.
It has come to the notice of SEBI that some registered investment advisers are engaged in unregulated activity by providing a platform for buying selling dealing in unregulated products including digital gold, stated a release by SEBI.
Investment Advisers are, hereby, advised to refrain from undertaking such unregulated activities. Any dealing in unregulated activities by Investment Advisers may entail action as deemed appropriate under the SEBI Act, 1992 and regulations framed thereunder, it added.
The SEBI statement further highlighted the fact that undertaking such unregulated activity including dealing i.e. advisory, distribution and execution implementation services in digital gold by Investment Advisers is not in accordance with the provisions of Section 12 1 of the SEBI Act, 1992 read with the SEBI Investment Advisers Regulations, 2013. The SEBI statement assumes significance as the recent past has seen an exponential rise in the number of Indians trading in products like Bitcoins and other cryptocurrencies along with NFTs and digital gold.
Some of the new-age investment and advisory platforms also offer facilities wherein individuals can buy digital assets, which are quite popular with young and first time investors especially millennials.
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