WARNING! Don’t Provide Investment Advisory Without SEBI Registration

In a recent incident, SEBI (Securities & Exchange Board of India) came to know the some people have been providing investment advisory or portfolio management services without registering their firms in SEBI. 

According to the SEBI, no person or business is allowed to offer investment advisory or portfolio management services to others without seeking the appropriate registration certificate from SEBI. 

What happens if you provide investment advisory or portfolio management services without Registration in SEBI?

Recently, SEBI has taken appropriate action by letting warning letter issued to non-registered people and businesses involved in such activities. A person  was found involved in offering illegal investment advisory/portfolio management services in the market without obtaining the appropriate registration certificate from SEBI. A warning letter was issued to him from SEBI. He was asked not to indulge in any such activity. 

One crucial point that should be kept in mind under the SEBI Act, 1992, in accordance with SEBI (Investment Advisers) Regulations, 2013 and SEBI (Research Analysts) Regulations, 2014, no individual is permitted to work as an investment advisor or a research analyst except he has secured a certificate of registration from the Board under these guidelines. Working in such a profile without registration with SEBI may encompass the commencement of action as thought suitable under the SEBI Act, 1992.

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SEBI has taken action against 10 units for offering investment advice to the public without getting registration with SEBI directing them:

• To cease and desist from acting as investment advisers and cease to solicit or undertake such activities or any other unregistered activity in the securities market, directly or indirectly, in any manner whatsoever.
• Immediately withdraw and remove all advertisements, representations, literatures, brochures, materials, publications, documents, websites, etc. In relation to their investment advisory activity.

So, whether you are involved in any such activity or know someone who is doing such things, it is strongly recommended to refrain from such things. This is something that must be completely avoided to avert any legal repercussions.