Description

SEBI enquiry order disposing proceedings against Investment Adviser Manoj Jethanand Varyani without adverse action after allegations of conflict of interest violations.

Summary

SEBI has disposed of proceedings against Manoj Jethanand Varyani, Proprietor of Smart Financial (Registration No. INA000015419), without any adverse action following an enquiry into alleged violations of Investment Adviser regulations regarding conflict of interest and arm’s length distance requirements.

Key Points

  • Manoj Jethanand Varyani held individual proprietorship registration as Investment Adviser for Smart Financial
  • Allegations included functioning as director (70% shareholding) of another IA entity - Bestway Smart Financial Private Limited
  • Served as Principal Officer in both Smart Financial and Bestway Smart Financial Private Limited
  • SEBI inspection conducted for period April 1, 2022 to July 31, 2023
  • Alleged violation of Regulation 15(3) of IA Regulations 2013 regarding arm’s length distance
  • Designated Authority recommended disposal without adverse action

Regulatory Changes

No new regulatory changes introduced. Case involves application of existing Investment Adviser regulations regarding conflict of interest and operational independence.

Compliance Requirements

  • Investment Advisers must maintain arm’s length distance between advisory activities and other business activities
  • Proper segregation of roles and responsibilities required when involved with multiple IA entities
  • Compliance with Regulation 15(3) of SEBI (Investment Advisers) Regulations, 2013

Important Dates

  • Inspection Period: April 1, 2022 to July 31, 2023
  • SEBI Inspection Date: August 18, 2023
  • Show Cause Notice: July 12, 2024
  • Enquiry Report: February 28, 2025
  • Order Date: August 6, 2025

Impact Assessment

Minimal market impact as this is an individual case disposal without adverse action. The order reinforces existing compliance requirements for Investment Advisers regarding operational independence and conflict of interest management, but does not establish new precedents or penalties.

Impact Justification

Individual case disposal without adverse action has limited broader market impact