sebi:Order/AK/AS/2023-24/28868
Facts / Headnote
Penalty imposed on the Noticee for violations of IA Regulations, PFUTP Regulations, and SEBI Act provisions
Provisions invoked
- s. 15
- s. 12A
- s. 15H
- s. 15J
- s. 28A
- s. 15C
- s. 23
- s. 15E
Regulations relied on
- SEBI (Intermediaries) Regulations, 2008
- SEBI (Investment Advisers) Regulations, 2013
- SEBI (PFUTP) Regulations, 2003
Parties
- Star India Market Research (Prop. Mr. Dharmendra Kumar)
Holding
The Noticee, a SEBI registered Investment Adviser, was found to have violated multiple provisions of IA Regulations, PFUTP Regulations, and SEBI Act including promising assured returns, failing suitability and risk profiling assessments, offering HNI products to non-HNI clients, charging arbitrary fees, and non-submission of information sought by SEBI. A monetary penalty of Rs. 20,00,000/- was imposed under Sections 15C, 15EB, 15HA and 15HB of the SEBI Act.
Full text
Adjudication order in the matter of Star India Market Research Page 2 of 52 SEBI Act, 1992 (hereinafter referred to as “SEBI Act”), IA Regulations, SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations”), and circulars issued by SEBI.
Adjudication order in the matter of Star India Market Research Page 3 of 52 4.1 Clauses 1, 2, 5, 6 and 8 as specified under Third Schedule of Code of Conduct for Investment Advisers read with Regulation 15(9) of IA Regulations. 4.2 Regulation 3 (a), (b), (c) and (d), 4(1) and 4(2)(k), 4(2)(o) and 4(2)(s) of PFUTP Regulations read with Section 12A(a), (b) and (c) of SEBI Act, 1992 (hereinafter referred to as “SEBI Act”). 4.3 Regulation 13, 16 and 17 of IA Regulations. 4.4 Regulations 15(1), 15(12), 16(a), 16(b), 16(c) and 16(d), 17(a) and 17(e) of IA Regulations. 4.5 Regulations 6(b) and 6(f) read with Regulations 7(1)(b) and 13(a) of the IA Regulations. 4.6 SEBI Circular CIR/OIAE/2014 dated December 18, 2014. 4.7 Regulation 21(1) read with Regulation 28(f) of IA Regulations. 4.8 SEBI Order dated November 13, 2019
Adjudication order in the matter of Star India Market Research Page 4 of 52 ISSUE No. III: If so, what should be the monetary penalty that should be imposed upon the Noticee, after taking into consideration the factors stipulated in Section 15J of the SEBI Act r/w Rule 5(2) of the Adjudication Rules?
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