- The short — summary of changes
- Who’s covered & timelines
- Cost math: escrow/FD vs bank guarantee
- Operational playbook & “hacks”
- Audit checklist, disclosures & grievance flow
- Weekly circulars roundup (SEBI/RBI/IRDAI/UIDAI)
- FAQ
The short
- Higher certainty for clients: Deposit/guarantee aims to ring-fence liabilities and strengthen grievance redressal.
- Differentiated slabs: Requirements scale by registration type and client money handling.
- Transition window: Existing RAs/IAs get time to set up escrow/FD/BG and update disclosures.
Who’s covered & timelines (illustrative)
| Entity | Triggers | Deposit/BG option | Key dates |
|---|---|---|---|
| Research Analyst (individual) | Fee-based reports/advice | FD/escrow deposit (₹X lakh) or BG | T+60 days from circular effective |
| Research Entity (non-individual) | Analyst team; subscriptions | Higher slab; auditor attestation | T+90 days |
| Investment Adviser (individual) | Advisory fees; non-POA | FD/escrow deposit (₹Y lakh) | T+60 days |
| Investment Adviser (non-individual) | Advisory at scale | Higher slab or BG with renewal covenants | T+90 days |
Cost math — what to pick & why
Option A: Fixed Deposit / Escrow
- Pros: Simple, transparent; earns interest (offsets cost partly).
- Cons: Cash tied up; breakage penalties if altered mid-term.
- Docs: Lien marking, bank letter, auditor confirmation.
Option B: Bank Guarantee
- Pros: Lower upfront cash; flexibility on working capital.
- Cons: BG commission (0.75–2.0% p.a.), collateral margin, renewal risk.
- Docs: BG text as per format; board approvals.
Illustrative annualized cost comparison
| Deposit size | FD route (6.5% yield) | BG route (1.25% fee + 25% cash margin) | Effective annual cost |
|---|---|---|---|
| ₹5,00,000 | Interest earned ~₹32,500 | Fee ₹6,250; margin opp. cost ~₹8,125 | FD: negative cost (earns); BG: ~₹14,375 |
| ₹15,00,000 | Interest ~₹97,500 | Fee ₹18,750; margin opp. cost ~₹24,375 | FD: earns; BG: ~₹43,125 |
Operational playbook (“hacks” that hold up in audits)
- Open a dedicated RA/IA compliance account with view-only access for compliance/officers; keep client fees separate from ops.
- Automate renewal ticklers: BG/FD maturity alerts at T-90/T-30/T-7; link to board agenda.
- Template disclosures on website, contracts, and every invoice: deposit/BG details, grievance desk, escalation path.
- Ticketing for grievances (email + form) with SLA stamps; export quarterly to CSV for audit.
- Scope cyber: freeze report delivery flows (no WhatsApp PDFs without watermark; use client portal/email with tracking).
Audit checklist & disclosures
- Copy of FD receipt/BG with lien & bank letters.
- Board resolution, UBO/KMP list, PAN/GST copies.
- Client agreement latest version control; fee schedule.
- Complaint register with closure codes & TAT.
- Website disclosures: registration no., validity, deposit/BG statement, Do/Don’t list.
Weekly circulars roundup (SEBI/RBI/IRDAI/UIDAI)
- SEBI: Clarifications on intermediary obligations; updates to cyber/incident reporting windows.
- RBI: Payments/UPI limits & sandbox milestones; co-lending FAQs.
- IRDAI: Health product guideline tweaks; protection of policyholder data.
- UIDAI: e-KYC process simplification; offline verification standards.
FAQ
- Can I split deposit between entities? Keep deposit at the registered entity level; avoid cross-pledge.
- BG from any bank? Prefer scheduled commercial banks; use regulator-specified text & validity.
- Interest on escrow usable? Treat as firm income; do not net against client refunds unless contractually allowed.