Description

SEBI enquiry order disposes proceedings against Investment Adviser Manoj Jethanand Varyani without adverse action following allegations of regulatory violations.

Summary

SEBI has disposed of enquiry proceedings against Manoj Jethanand Varyani, Proprietor of Smart Financial (Registration No. INA000015419), without any adverse action. The proceedings originated from allegations that the investment adviser violated regulations by failing to maintain arm’s length distance between business activities while holding dual roles.

Key Points

  • Manoj Jethanand Varyani was registered as Investment Adviser (INA000015419) in individual capacity as Proprietor of Smart Financial
  • SEBI inspection conducted on August 18, 2023 for period April 1, 2022 to July 31, 2023
  • Allegations included functioning as director (70% shareholding) of another IA entity Bestway Smart Financial Private Limited while holding individual proprietorship registration
  • Noticee served as Principal Officer in both Smart Financial and Bestway Smart Financial Private Limited
  • Designated Authority recommended disposal without adverse action under Regulation 26(1)(i) of SEBI Intermediaries Regulations, 2008

Regulatory Changes

No regulatory changes introduced. This is a case-specific enquiry order disposing of proceedings without establishing new regulations or amendments.

Compliance Requirements

The order serves as a reminder for Investment Advisers to:

  • Maintain arm’s length distance between investment advisory activities and other business activities as per Regulation 15(3) of IA Regulations, 2013
  • Avoid dual roles that may create conflicts of interest
  • Ensure compliance with SEBI Intermediaries Regulations, 2008

Important Dates

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

Impact Assessment

Limited market impact as this concerns an individual investment adviser case. The disposal without adverse action indicates the allegations were not substantiated sufficiently to warrant penalties. This order provides clarity on regulatory expectations for investment advisers regarding conflict of interest and business structure compliance.

Impact Justification

Individual investment adviser case disposed without adverse action - limited market impact