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The Discretionary Investment Advisory Agreement is a crucial document used when establishing a professional relationship between a SEBI-registered investment adviser and a client who wishes to delegate investment decision-making authority. This agreement is essential in the Indian financial services sector, where it must comply with SEBI regulations and other applicable laws. The document grants the adviser discretionary powers to make investment decisions on behalf of the client within agreed parameters, while establishing clear guidelines, responsibilities, and protections for both parties. It includes detailed provisions covering investment objectives, risk management, fee structures, reporting requirements, and regulatory compliance. This agreement is particularly important as it combines elements of fiduciary duty with regulatory requirements specific to the Indian market, making it distinct from non-discretionary advisory agreements or international equivalents.

1. Parties: Identification of the Investment Adviser and the Client, including registration details of the adviser and complete information of the client

2. Background: Context of the agreement, including adviser's SEBI registration status and client's desire for discretionary investment advisory services

3. Definitions: Key terms used throughout the agreement including but not limited to 'Discretionary Authority', 'Investment Objectives', 'Portfolio', and 'Advisory Fees'

4. Appointment and Scope of Services: Formal appointment of adviser and detailed description of discretionary investment advisory services to be provided

5. Investment Objectives and Strategy: Agreed-upon investment objectives, risk tolerance, and investment strategy guidelines

6. Discretionary Authority: Extent and limitations of the adviser's discretionary authority over the client's portfolio

7. Fees and Expenses: Detailed fee structure, calculation method, payment terms, and other applicable expenses

8. Representations and Warranties: Statements of fact and guarantees from both parties regarding their capacity, authority, and compliance with laws

9. Risk Disclosure: Comprehensive disclosure of investment risks as required by SEBI regulations

10. Confidentiality: Obligations regarding confidential information and client data protection

11. Conflicts of Interest: Disclosure and management of potential conflicts of interest

12. Term and Termination: Duration of agreement and conditions for termination by either party

13. Indemnification: Mutual indemnification provisions and limitations of liability

14. Notices: Method and addresses for formal communications between parties

15. Governing Law and Jurisdiction: Specification of Indian law as governing law and jurisdiction for dispute resolution

16. Miscellaneous: Standard boilerplate provisions including severability, entire agreement, and amendments