sebi:Order/AN/RG/2024-25/31311
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Facts / Headnote
Alleged violations of Regulation 15A, Regulation 19(3) and 4(g) of IA Regulations and Para 9 of Master Circular SEBI/HO/MIRSD-PoD-2/P/CIR/2023/89 upheld against the Noticee
Provisions invoked
- s. 11B
- s. 11
- s. 15
- s. 19
- s. 15J
- s. 15I
- s. 15F
- s. 28A
- s. 15E
Regulations
- Reg. 4
- Reg. 3
- Reg. 30(3)
- Reg. 19
- Reg. 30(2)
- Reg. 15A
- Reg. 19(3)
- Reg. 4(g)
- Reg. 15(A)
Parties
- Basant Maheshwari Wealth Advisers LLP
Holding
The Noticee was held to have violated Regulation 15A of the IA Regulations by charging advance fees on AUA basis where AUA was zero, violated Para 9 of the Master Circular by uploading YouTube videos with exaggerated captions that constituted advertisements, and violated Regulation 19(3) read with Regulation 4(g) of the IA Regulations by not conducting the required annual audit.
Full text
Adjudication order in the matter of Basant Maheshwari Wealth Advisers LLP |Page 2 of 38 Accordingly, SEBI initiated adjudication proceedings against the Noticee under Section 15-I of SEBI Act, 1992 (hereinafter also referred as “SEBI Act”) for the alleged violations of the provisions, as stated.
Adjudication order in the matter of Basant Maheshwari Wealth Advisers LLP |Page 3 of 38 4. Findings and Observations by SEBI and alleged violations thereto in respect of the Noticee 4.1. Fees and Charges during the inspection period: 4.1.1. In this regard, the Noticee submitted that: “As per our understanding of the client data, there are 22 unique clients (with 2 portfolios each) who have subscribed to an AUA & fixed fee portfolio between 19th Oct 2023 to 31st December 2023. Please clarify if there is any inaccuracy in this data by sharing the exact list of clients that were considered in this observation. Our submission : Regulations: Link (Circular No. SEBI/HO/IMD/DF1/CIR/P/2020/182 issued on 23-Sep- 20 making the guidelines effective from 30-Sep-20)
Adjudication order in the matter of Basant Maheshwari Wealth Advisers LLP |Page 4 of 38 b. Each service can be priced differently, while ensuring that overall fee charged under ALL the services offering AuA fee mode is less than 2.5% and overall fee charged under ALL the services offered under fixed fee mode is less than 1.25L. c. The overall limits of the fee that can be charged to a client across ALL services in a particular mode are followed. Clarification: As per our understanding of the client data, the total number of users on the AuM plan after 19th October for which AuA is not added, is 52 clients. Please clarify if there is any inaccuracy in this data by sharing the exact list of clients that were considered for this observation. Submission: For the clients where the AuA data is not added their AuA at the end of the analysis period is Zero. It is because clients have already exited/not invested in their portfolios on or before the end of
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Source: SecMarx — sebi:Order/AN/RG/2024-25/31311. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.