The National Stock Exchange or NSE on Thursday prohibited members and authorized persons from using names such as advisor, mutual fund, mutual fund services, capital manager, fund advisor, and asset/wealth/portfolio management.
The Mumbai-based stock exchange said it creates a misconception among investors.
“It has been observed by the Exchange that Trading Members/Authorised Persons are using words such as Advisor, Asset/Wealth/Portfolio Management etc. in their names which is misleading and may lead to clients/investors that the Trading Members/Authorised Persons are are registered for offering services other than broking services without registration as applicable for those services with SEBI/other regulators, NSE said in a statement.
The circular states, ‘The entity should be registered in the name of the trading member/authorised person and should not in any way perform any role for which the entity is not registered.’
The reason behind this development is to prevent investors from getting confused by the fact that traders have been registered for offering services other than broking services without the applicable registration.
Following this order, members can use the listed nomenclature only if they have registered themselves in that capacity with SEBI or other regulators. However, it may be noted that the list provided is illustrative and not exhaustive, the circular clarifies.
Further, NSE has advised traders to comply with this order by March 31, 2023, at the Exchange and with the Registrar of Companies in case the listed nomenclature is used.
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