sebi:Order/SV/DP/2023-24/30169
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Violation of Regulation 13(ii) not established; violations of Regulations 13(iii), 24(2), 19, 20(1) and 25(1)(i) established and penalty of Rs.7,00,000 imposed under Section 15EB
Provisions invoked
- s. 15
- s. 19
- s. 15J
- s. 28A
- s. 15E
- s. 2(89)
Regulations
- Reg. 13
- Reg. 3
- Reg. 9
- Reg. 25
- Reg. 2
- Reg. 19
- Reg. 20
- Reg. 20(1)
- Reg. 24(2)
- Reg. 25(1)
- Reg. 25(1)(i)
- Reg. 2(w)
Parties
- Investopher Research Services Private Ltd.
Holding
The Noticee violated Regulations 13(iii), 24(2) read with Points 1 and 7 of the Code of Conduct, 19, 20(1) and 25(1)(i) of the RA Regulations, while violation of Regulation 13(ii) was not established, and a penalty of Rs.7 lakh under Section 15EB was imposed.
Full text
Adjudication Order in the matter of Investopher Research Services Private Ltd. Page 2 of 17 on the aforesaid findings / observations of the inspection vide its letter/email dated April 03, 2023.
Adjudication Order in the matter of Investopher Research Services Private Ltd. Page 3 of 17 failed to disclose the material change in your principal place of business to SEBI and hence, violated Regulation 13(ii) of RA Regulations. b. The Noticee did not use the term “Research Analyst” in all its correspondences with your clients. Therefore, it was alleged that the Noticee has violated Regulation 13 (iii) of RA Regulations. c. Noticee has, on its website, claimed under the “Mission Head” that it employs “Top Notch Research Analysts” despite only single individual working as research analyst. Noticee has also claimed on its website that it focuses on client’s renewal and not on finding new clients. However, the Noticee has been able to renew only 86 of 6166 clients. On the contrary, it is observed that the Noticee claims on its website of “Highest Customer Retention Ratio and least Client’s Complaints. It is, therefore, alleged that the Noticee has failed to act with honesty and good faith and have been unable to ensure compliances. Therefore, it was alleged that the Noticee has violated Regulation 24(2) of RA Regulations read with Point 1 and Point 7 of the Code of Conduct of Research Entities. d. It was further observed that the Noticee has claimed to provide services to its clients by sending research recommendation through SMS, based on the rationale of technical analysis. However, during inspection it was observed from random sampling that no such disclosures were made in
Adjudication Order in the matter of Investopher Research Services Private Ltd. Page 4 of 17 basis for investment decision. Based on the said definition, it can be inferred that research report would include research recommendation sent through SMS. However, it was observed that the Noticee did not define the terms used in its research recommendation sent through SMS to its clients. Regulations 20(1) of the Research Analysts Regulations, mandates that research reports shall define the terms used in making recommendations. In light of the aforesaid, it was alleged that the Noticee has violated 20 (1) of RA Regulations. f. It was further observed that the Research Reports / Research Recommendations provided by the Noticee (through SMS) were not duly signed and dated as specified in RA Regulations. Therefore, it was alleged that the Noticee has violated Regulation 25 (1) (i) of the RA Regulations.
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Source: SecMarx — sebi:Order/SV/DP/2023-24/30169. 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.