India’s Demat Account Holders More Than Double in 3 Years to 7.38 Crore in October 2021

As per the information provided by the Securities and Exchange Board of India (SEBI), as of 31 October 2021, there are around 2.75 crore mutual fund (MF) investors, 7.38 crore demat account holders and 1,324 SEBI registered investment advisors (RIA).
 
The population of demat account holders in the country has gone from 3.59 core in 2018-19 to 7.38 crore in the current fiscal year up to 31 October 2021. The number of demat account holders has increased by 1.87 crore from 5.51 crore in the previous financial year.
 
This was stated by the union minister of state for finance Pankaj Chaudhary in a written reply to a question in Lok Sabha.
 
The significant jump seems to come mostly on the back of bourses' attractive valuations and eased interest regime of Reserve Bank of India (RBI).
 
The ratio of mutual fund investors and demat account holders to the registered investment advisors (RIA) in India is around 76,510: 1, the minister added.
 
The minister further stated that SEBI (Investment Advisers) Regulations, 2013 were notified on 21 January 2013 to strengthen the regulatory framework for investment advisors.
 
Subsequently, certain amendments to the Investment Advisors Regulations were notified on 3 July 2020, the minister added.
 
Answering a question on whether the high barriers to entry have led to the reduced number of authorized financial advisors in India, the minister stated that as per the information provided by SEBI, the registered Investment Advisors have increased from 1,298 (as of 30 June 2020) to 1324 (as on 31 October 2021).
 

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Changes in Our Business Model
 
 
25th Sept 2020
 
Greetings from Moneylife Advisory Services
 
Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular
 
As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.
 
While these extensive and frequent changes, designed to strengthen the conduct of IAs are well-meaning, these have sharply increased compliance efforts and cost. We, being online advisors, find many of changes harder to implement, compared to advisors working in the physical space. We will have to have an army of advisors, administrative and tech staff to be compliant. If we do this, we will have to divert money to these areas and the cost of our service will double. We want to remain the least-cost service in the market to benefit more and more people. In the circumstances, we are forced to change our business model from “advisory” to “research”. This will mean the following:
 
What remains the same:
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  • The magazine and all textual content will remain as part of the service
  • We will have to suspend the restructuring tool.
 
What changes:
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Over the next few weeks our site and our communication to you will reflect these and other additional changes.
 
We feel this will not affect you much in terms of what really matters in investing: knowing what to buy and when to buy. This is our edge and it will still be available to you.
 
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Debashis Basu
Founder