Sr. No. | Category of Violation | Violation Observed |
1 | Redressal of Client grievances | • Failure to redress client’s grievances within the timelines specified under SEBI circulars. • RA has failed to publish updated and correct complaints data on its website. • Non display of specified Investor charter on website and mobile applications. If website/ mobile application is not maintained, investor charter emails not sent to clients. |
2 | Assured returns and Misleading claims | • Misguiding clients by mentioning services provided by Investment Adviser in website, communication with client and welcome kit sent to clients. • Soliciting clients for personalized advisory services. • Making misleading claims in website such as ‘best’, ‘authentic’/ affiliated with MIIs. • Promising assured returns to clients. • Publishing of unverified and misleading claims regarding the number of research analysts employed by the firm and accuracy of the research recommendations in its website. • Sharing screenshots of profits earned by previous clients to the prospective clients. Inducement to infuse more capital, despite losses incurred on previous recommendations, with a promise to recover the losses. |
3 | Research Report | • Failure to maintain duly signed and dated copy of research report. • Failure to maintain rationale for arriving at research recommendations. • Disclosures as mandated under RA Regulations were not made in research reports distributed by the RA. |
4 | Address of RA | • Failure to intimate SEBI with respect to material changes such as change in principal place of business, opening of corporate office. • Mentioning of address not currently rented/owned by RA in its website. • Not having appropriate rent agreement/ Mention of incorrect business in rent agreement. |
5 | Other Observations | • Incorrect information provided to the Inspection team. • RA has not exercised appropriate due diligence during appointment of employees. • Employed persons with expertise of working in investment advisory firms, which raises doubt on operations of RA. • Non-monitoring of communications between employees and clients/potential clients leading to instances of employees of RAs assuring returns from the stock recommendations of the RA. • Not obtaining fresh NISM certification specified for research analysts prior to expiry of old certification |
