Description

SEBI issues order under Section 12(3) against Research Analyst Parag Salot for mis-selling services, fraudulent fund collection, and multiple regulatory violations.

Summary

SEBI has issued an order under Section 12(3) of the SEBI Act against Research Analyst Parag Salot (Registration No. INH000000115) for multiple violations including mis-selling services, fraudulent fund collection, and non-compliance with Research Analyst Regulations. The inspection covered the period from April 1, 2022 to February 29, 2024.

Key Points

  • Research Analyst Parag Salot (PAN: APEPS7000R) registered with SEBI since March 2, 2015
  • SEBI conducted inspection for period April 1, 2022 to February 29, 2024
  • Multiple violations identified including fraudulent practices and regulatory non-compliance
  • Order issued under Section 12(3) of SEBI Act read with Regulation 27 of Intermediaries Regulations
  • Violations span across SEBI Act, RA Regulations, and PFUTP Regulations

Regulatory Changes

No new regulatory changes introduced - this is an enforcement action under existing regulations.

Compliance Requirements

  • Research Analysts must maintain proper records of research recommendations
  • Annual audit compliance required from FY 2014-2015 onwards
  • Proper disclosure of office address changes to SEBI
  • Accurate information about offices where RA activities are conducted
  • Proper advertisement disclosures including RA name, registered office, and SEBI registration number
  • Display of investor charter and complaints on website
  • Maintenance of email details for RA activities
  • Valid NISM certification required for RA activities

Important Dates

  • Registration Date: March 2, 2015
  • Inspection Period: April 1, 2022 to February 29, 2024
  • Inspection Findings Communicated: March 18, 2024
  • Noticee Reply Submitted: March 25, 2024

Impact Assessment

This enforcement action reinforces SEBI’s strict oversight of research analysts and intermediaries. The comprehensive nature of violations - from fraudulent practices to basic compliance failures - signals heightened regulatory scrutiny. Research analysts and other intermediaries should ensure full compliance with disclosure requirements, record-keeping obligations, and certification requirements to avoid similar regulatory action.

Impact Justification

High regulatory action against research analyst with multiple serious violations including fraud and mis-selling