Description

SEBI adjudication order against Capital Stroke Investment Services Pvt. Ltd. and its directors for non-compliance with investment adviser regulations.

Summary

SEBI has issued an adjudication order against Capital Stroke Investment Services Pvt. Ltd. (Registration No. INA000001316) and its directors - Upendra Singh Rajput, Prashant Singh Baghel, and Kamlesh Dhole. The order follows an inspection conducted from November 2020 covering the period April 2019 to September 2020, which revealed non-compliances with SEBI Act, PFUTP Regulations, and Investment Advisers Regulations.

Key Points

  • SEBI inspection of Capital Stroke Investment Services Pvt. Ltd. revealed regulatory violations
  • Inspection period covered April 1, 2019 to September 22, 2020
  • Company directors Upendra Singh Rajput, Prashant Singh Baghel, and Kamlesh Dhole are named as noticees
  • SEBI issued interim order on August 27, 2021 followed by confirmatory order on June 8, 2022
  • Company provided additional documentation including bank statements, client records, and refund information
  • Multiple adjudicating officers appointed due to transfers and case reallocation

Regulatory Changes

No new regulatory changes introduced - this is an enforcement action for existing violations.

Compliance Requirements

Investment advisers must ensure compliance with:

  • SEBI (Investment Advisers) Regulations, 2013
  • SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003
  • Proper maintenance of client records and documentation
  • Timely response to SEBI inquiries and inspections

Important Dates

  • Inspection Period: April 1, 2019 to September 22, 2020
  • Physical Inspection: November 3-6, 2020
  • Interim Order: August 27, 2021
  • Confirmatory Order: June 8, 2022
  • Current AO Appointment: April 30, 2025

Impact Assessment

This enforcement action serves as a reminder to all registered investment advisers about the importance of regulatory compliance. While specific to Capital Stroke Investment Services, it reinforces SEBI’s commitment to monitoring and enforcing compliance among investment advisers. The action may prompt other investment advisers to review their compliance frameworks and documentation practices.

Impact Justification

High importance due to SEBI enforcement action against registered investment adviser; medium impact as specific to one entity