Mumbai, Nov 12 – A fresh report from the Association of Registered Investment Advisers (ARIA) shows that most of the Securities and Exchange Board of India’s (SEBI) enforcement actions focus on companies giving speculative trading tips, not on firms that offer long‑term fiduciary advice.
Since SEBI’s Investment Advisers regulations began in 2013, 218 enforcement orders have been issued. Of those, 147 orders – 67 percent – targeted unregistered entities that provide trading calls. Among the 71 orders that came against registered firms, 65 (92 percent) hit registered trading‑call providers that deal in intraday, derivatives or stock‑tipping work. Only six orders (about 8 percent of actions against registered entities and less than 3 percent overall) went to registered investment advisers.
The year 2024-25 saw 50 orders. Nearly 62 percent of them were against unregistered entities, while 30 percent hit registered trading‑call providers. All six orders against investment advisers dealt with procedural gaps like missing documents, KYC shortfalls or reporting problems—none involved investor losses or fraud. In contrast, unregistered firms faced fund‑disbursement orders and asset‑freezing measures, which were not applied to registered firms.
“Historically, SEBI’s enforcement under the Investment Advisers rules has largely targeted trading‑call providers, not fiduciary advisory services,” said ARIA chair Renu Maheshwari. “Since trading‑call providers can no longer register as investment advisers, the regulator might shift its focus to backing serious, client‑centred advice and simplifying the compliance burden that was meant for a different arena.”
Indore emerged as the hotspot, accounting for 13 of the 50 orders in FY 2024‑25, or 26 percent. Most cases against unregistered entities began with public complaints—87 percent—whereas inspections accounted for almost 79 percent of actions against registered firms.
ARIA’s “SEBI Orders Compilation and Analysis Report 2024‑25” highlights the growing gap between speculative trading providers and bona fide fiduciary advisers, underscoring a need for clearer regulatory attention on genuine investment counsel.
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