Northspread
Regulatory updates/NISM Series XV: Research Analyst
13 Sept 2024SEBI Master Circular for Research Analysts

CeFCoM launched — a traceable, centralized channel for paying RA fees

SEBI operationalized CeFCoM (Centralized Fee Collection Mechanism), a BSE-run portal letting clients pay advisory/research fees only to registered RAs through one closed, traceable channel — an optional alternative to direct bank transfer, meant to make it obvious when a payment is going to an unregistered entity.

From the circular
“With growing interest in the securities market, there is a need for a mechanism for an investor to discern whether payment of fees is being made only to a registered IA/RA. ... the "Centralized Fee Collection Mechanism for IA and RA" (CeFCoM) is being operationalized to facilitate collection of fees by registered IAs and RAs from their clients. Under this mechanism, clients shall pay fees to IAs/RAs, through a designated platform/portal administered by recognized Administration and Supervisory Body (ASB).”
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In practice

A client wanting extra assurance that fees are actually reaching a SEBI-registered RA can route payment through CeFCoM's BSE-administered portal instead of a direct bank transfer. The RA can't make this mandatory, but should be able to explain the option and walk the client through it if asked.

Illustrative scenario written by Northspread — not text from the circular itself.