SEBI IAS, RAS allows the use of mutual funds for Deposit Compliance

SEBI has allowed investing consultants and research analysts to use liquid mutual funds and overnight mutual funds to meet their mandatory deposit requirements, providing the option of scheduled bank deposits.

Overnight mutual funds are a kind of debt mutual fund that invests in overnight securities – only one -day maturity debt equipment.

Currently, investment consultants (IAS) and research analysts (RAS) are required to maintain a clear deposit in the scheduled bank, which is in favor of the investment advisory administration and the supervisory body (IAASB) or the research analyst administration and the supervisory body (RASB).

Based on the representations of industry participants and the response received during the public consultation, the SEBI board approved the proposal at its June 2025 meeting. The amendments to the rules of research analysts and the standards of investment advisers were notified by the regulator on August 6-7, respectively.

According to a circular issued on Tuesday, Sebi said, “To ensure compliance with deposit requirements under standards, IAS and RAS will now maintain deposit in the form of liquid mutual funds or overnight mutual fund units or a deposit with a scheduled bank.”

Such a deposit will be marked as a lien in favor of IAASB or RASB, as may be the case.

Investing consultants and research analysts are required to adhere to improved standards by September 30.

The leading stock exchange BSE, which acts as both IAASB and RASB, has been directed to apply the systems and procedures required for the implementation of the provisions of the new structure and bring the same to the notification of registered entities.