Description
SEBI issues final order under Section 12(3) against Research Analyst Punit Kumar (INH000008844) for violations including guaranteed returns, misleading clients, and non-compliance with disclosure and record-keeping requirements.
Summary
SEBI has issued a final order under Section 12(3) of the SEBI Act, 1992 read with Regulation 27 of SEBI (Intermediaries) Regulations, 2008 against Punit Kumar, proprietor of Shrimoney Research Analyst (SEBI Registration No. INH000008844, PAN: AQHPK8566C). The order follows an inspection conducted on February 13, 2024 covering the period from April 01, 2022 to February 13, 2024, which revealed violations of SEBI (Research Analyst) Regulations, 2014 and SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003.
Key Points
- SEBI inspection conducted on February 13, 2024 for period April 01, 2022 to February 13, 2024
- Research Analyst registration number: INH000008844
- PAN: AQHPK8566C
- Pre-enquiry show cause notice issued July 04, 2024
- Noticee reply submitted July 25, 2024
- Personal hearing conducted August 13, 2024
- Enquiry Report submitted January 27, 2025
- Final order issued under Section 12(3) of SEBI Act, 1992
- Proceedings initiated under Chapter V of Intermediaries Regulations
Regulatory Changes
No new regulatory changes introduced. This order enforces existing provisions of:
- SEBI (Research Analyst) Regulations, 2014
- SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003
- SEBI (Intermediaries) Regulations, 2008
Compliance Requirements
Research Analysts must ensure:
- No guarantee of returns to clients
- No misleading communication or practices
- Full compliance with disclosure requirements under Regulation 19 of RA Regulations
- Maintenance of complete records including rationale for research recommendations
- Adherence to all provisions of SEBI (Research Analyst) Regulations, 2014
- Compliance with PFUTP Regulations to prevent fraudulent and unfair trade practices
Violations Found
- Guaranteed Returns and Misleading Clients: Violated PFUTP Regulations read with RA Regulations by guaranteeing returns and misleading clients
- Disclosure Failures: Failed to make disclosures required under Regulation 19 of RA Regulations
- Record Keeping Failures: Did not maintain records of rationale for recommendations as required
Important Dates
- February 13, 2024: SEBI inspection conducted
- February 21, 2024: Inspection findings communicated to noticee
- March 04, 2024: Noticee submitted response to observations
- March 05, 2025: Post-enquiry show cause notice issued
- July 04, 2024: Pre-enquiry SCN issued
- July 25, 2024: Noticee reply to pre-enquiry SCN
- August 13, 2024: Personal hearing conducted
- August 20, 2024: Additional submissions filed
- January 27, 2025: Enquiry Report submitted
- October 10, 2025: Final order published
Impact Assessment
Market Impact: Low - affects one individual research analyst and their clients
Industry Impact: Medium - serves as regulatory precedent for enforcement of research analyst compliance standards
Investor Protection: High - action taken to protect investors from guaranteed return schemes and misleading research practices
Regulatory Precedent: Reinforces SEBI’s commitment to enforcing compliance among intermediaries, particularly regarding:
- Prohibition of guaranteed returns
- Mandatory disclosure requirements
- Record keeping obligations
- Prevention of misleading practices
This enforcement action demonstrates SEBI’s active monitoring and disciplinary framework for research analysts, emphasizing the importance of transparency, proper disclosures, and ethical conduct in the securities market.
Impact Justification
High severity enforcement action against a research analyst for serious violations including guaranteed returns and misleading clients. Impact is medium for regulatory precedent but low for market operations as it affects one individual research analyst. Importance is medium as it demonstrates SEBI's enforcement of research analyst regulations.