Description
SEBI imposes penalties on Capital Stroke Investment Services Pvt. Ltd. and its three directors for non-compliance with investment adviser regulations during 2019-2020.
Summary
SEBI has issued an adjudication order against Capital Stroke Investment Services Pvt. Ltd. (Registration No. INA000001316) and its three directors - Upendra Singh Rajput, Prashant Singh Baghel, and Kamlesh Dhole - for violations of SEBI Act, PFUTP Regulations, and Investment Advisers Regulations. The violations were identified during an inspection covering the period from April 1, 2019 to September 22, 2020.
Key Points
- Capital Stroke Investment Services is a SEBI registered investment adviser found non-compliant during inspection
- Inspection period covered April 1, 2019 to September 22, 2020
- Three directors are individually named as noticees in the adjudication proceedings
- SEBI had previously issued interim order (August 27, 2021) and confirmatory order (June 8, 2022)
- Company provided extensive documentation including bank statements, client records, and refund information
- Multiple adjudicating officers have been appointed due to transfers and case reallocations
Regulatory Changes
This adjudication reinforces existing compliance requirements under:
- SEBI (Investment Advisers) Regulations, 2013
- SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003
- SEBI Act, 1992
Compliance Requirements
- Investment advisers must maintain proper books of accounts and client records
- Adherence to pricing and fee collection guidelines
- Proper KYC documentation and client agreements
- Timely resolution of investor complaints
- Regular submission of required information to SEBI
Important Dates
- Inspection Period: April 1, 2019 to September 22, 2020
- Inspection Conducted: 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 regulatory precedent for investment adviser compliance. While specific to Capital Stroke Investment Services, it highlights SEBI’s continued focus on monitoring registered investment advisers and ensuring adherence to regulatory frameworks. The action may prompt other investment advisers to review their compliance procedures and documentation practices.
Impact Justification
Enforcement action against registered investment adviser affects regulatory compliance standards but limited to specific entity