Administration and supervision body
SEBI-recognised body that administers and supervises Investment Advisers on SEBI's behalf, currently BSE Limited as the Investment Adviser Administration and Supervisory Body (IAASB).
In plain language
SEBI does not check on every Investment Adviser itself, day to day. Instead, it picks one body to do this job.
The workbook calls this body a 'body or body corporate recognized by SEBI' for administration and supervision. Today, that body is BSE Limited. BSE holds this role under the title Investment Adviser Administration and Supervisory Body, or IAASB.
How it works
Every Investment Adviser must maintain a deposit of a sum specified by SEBI from time to time, held with a scheduled bank and marked as lien in favour of this recognised administration and supervision body, BSE Limited, as the current IAASB. This deposit is available for use if the adviser fails to pay dues arising from arbitration or conciliation proceedings, such as those under the Online Dispute Resolution mechanism.
The same body, in its role managing CeFCoM, the Centralized Fee Collection Mechanism, also provides the channel through which a client may optionally route fee payments to an adviser, tying administration, supervision and fee oversight together under one recognised body.
A worked example
A newly registered Investment Adviser, Sunrise Advisory Services, opens a fixed deposit with a scheduled bank for the sum SEBI specifies, and marks it under lien in favour of BSE Limited, the current IAASB.
A year later, a client raises a dispute against Sunrise through the SEBI Online Dispute Resolution process, and an arbitration award directs Sunrise to pay the client Rs 15,000. If Sunrise fails to pay this amount itself, the lien-marked deposit held with BSE as the administration and supervision body becomes available to satisfy the dues, giving the client a recovery route even if the adviser is uncooperative.
Why NISM asks about it
Chapter 18 (Key Regulations), section 18.6.6 'Deposit', describes the lien-marked deposit requirement in favour of the recognised administration and supervision body. Chapter 17 separately names BSE Limited as the currently recognised IAASB. Expect a question that connects the deposit requirement to the recognised body, or that asks what the deposit can be used for.
Common exam traps
- The body is recognised by SEBI, but is not SEBI itself — it is a separate body corporate, currently BSE Limited, carrying out administration and supervision on SEBI's behalf.
- The lien deposit protects client dues from arbitration and conciliation awards, not general adviser liabilities of every kind.
- Do not confuse this body's administration-and-supervision role with a KYC Registration Agency or with CERSAI — those handle KYC records, not adviser deposits or fee mechanisms.
Where this is taught
Free preparation for NISM Series X-ARelated terms
- Principal officerThe named individual at a non-individual intermediary who carries personal regulatory responsibility for the advisory business, and who must personally hold the prescribed qualification and NISM certification.
- CeFCoMThe Centralized Fee Collection Mechanism, managed by BSE Limited, an optional SEBI-recognised channel through which a client can pay an Investment Adviser's fee, instead of paying the adviser directly.
- BankruptUnder the Insolvency and Bankruptcy Code, 2016, a debtor formally adjudged bankrupt by a bankruptcy order, a partner of a firm against which such an order has been made, or any person adjudged an undischarged insolvent.
- Compliance auditA yearly audit of an Investment Adviser's regulatory compliance, conducted by a recognised accounting or company-secretarial professional, with material findings disclosed to clients.