Description

SEBI issues enquiry order against research analyst for failing to cooperate during inspection and allowing third parties to use his license inappropriately.

Summary

SEBI has issued an enquiry order under Section 12(3) of SEBI Act, 1992 against Nikhil Dayanand Baljekar (Registration No. INH000009001), a registered Research Analyst. The order relates to violations during the inspection period from April 1, 2022 to January 31, 2024, including non-cooperation during inspection and allowing third parties to misuse his license.

Key Points

  • Research Analyst failed to provide requested information and documents during SEBI inspection
  • Did not respond to inspection findings communicated on March 20, 2024
  • Allowed third parties to use his SEBI registration for Investment Adviser and Research Analyst services
  • Shared client details with unauthorized third parties
  • Permitted third parties to give recommendations to clients under his name
  • Outsourced core activities and engaged in mis-selling of research services
  • Show-cause notice issued on June 10, 2024 under Regulation 25(1)

Regulatory Changes

No new regulatory changes introduced. Order enforces existing compliance requirements under Research Analyst Regulations 2014 and Intermediaries Regulations 2008.

Compliance Requirements

  • Research Analysts must cooperate fully during SEBI inspections
  • Must provide all requested information and documents promptly
  • Cannot outsource core activities to third parties
  • Cannot allow unauthorized use of SEBI registration
  • Must maintain proper records and follow Code of Conduct
  • Cannot share client details with unauthorized parties

Important Dates

  • Inspection Period: April 1, 2022 to January 31, 2024
  • Inspection findings communicated: March 20, 2024
  • Show-cause notice issued: June 10, 2024
  • Order date: August 29, 2025

Impact Assessment

This enforcement action reinforces SEBI’s commitment to ensuring Research Analysts maintain professional standards and comply with regulatory requirements. It serves as a warning to other intermediaries about the consequences of non-cooperation during inspections and improper license usage. The case highlights the importance of maintaining direct control over licensed activities and protecting client confidentiality.

Impact Justification

Regulatory action against individual research analyst for procedural violations and license misuse