Description

SEBI imposes penalties on Eqwires Research Analyst and its partners for violations of research analyst regulations and acting as unregistered investment adviser.

Summary

SEBI has issued an adjudication order against Eqwires Research Analyst (Registration No. INH000007465) and its partners Bansri Pankajbhai Thakkar and Pranay Dineshbhai Morakhiya for violations of SEBI regulations during April 2020 to November 2021. The violations include acting as an unregistered investment adviser while being registered only as a research analyst.

Key Points

  • SEBI conducted inspection of Eqwires Research Analyst for the period April 1, 2020 to November 25, 2021
  • Violations observed under SEBI Act 1992, Research Analysts Regulations 2014, PFUTP Regulations 2003, and Investment Advisers Regulations 2013
  • Show Cause Notice issued on January 31, 2025
  • Noticees submitted reply on February 28, 2025
  • Matter involves holding out as investment adviser without proper registration

Regulatory Changes

This order reinforces the distinction between research analyst and investment adviser activities, emphasizing the need for separate registrations and compliance with respective regulatory frameworks.

Compliance Requirements

  • Research analysts must operate strictly within their registration scope
  • Investment advisory services require separate SEBI registration as Investment Adviser
  • Clear demarcation required between research and advisory activities
  • Proper disclosure and compliance with applicable regulations mandatory

Important Dates

  • Inspection Period: April 1, 2020 to November 25, 2021
  • Adjudication proceedings initiated: October 10, 2022
  • Show Cause Notice issued: January 31, 2025
  • Reply submitted: February 28, 2025

Impact Assessment

This enforcement action serves as a regulatory precedent for research analysts, clarifying boundaries between research and investment advisory services. It may lead to increased scrutiny of research analyst operations and compliance practices across the industry.

Impact Justification

Regulatory enforcement action affecting research analyst operations and compliance standards