Description
SEBI final order under Section 12(3) of SEBI Act, 1992 against Research Analyst Punit Kumar for violations including guaranteed returns, misleading clients, and non-compliance with disclosure and record-keeping requirements.
Summary
SEBI issued a final order under Section 12(3) of SEBI Act, 1992 read with Regulation 27 of SEBI (Intermediaries) Regulations, 2008 against Punit Kumar, proprietor of Shrimoney - Research Analyst (Registration No. INH000008844, PAN: AQHPK8566C). The order follows 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 found violations of RA Regulations and PFUTP Regulations during inspection period (April 01, 2022 to February 13, 2024)
- Research Analyst guaranteed returns and misled clients in violation of PFUTP Regulations
- Failed to make required disclosures under Regulation 19 of RA Regulations
- Did not maintain records of rationale as required
- Pre-enquiry show cause notice issued on July 04, 2024
- Noticee responded on July 25, 2024 and attended personal hearing on August 13, 2024
- Designated Authority submitted Enquiry Report on January 27, 2025
- Final show cause notice issued on March 05, 2025
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
For Research Analysts:
- Must not guarantee returns to clients
- Must not mislead clients through false or deceptive communications
- Must comply with disclosure requirements under Regulation 19 of RA Regulations
- Must maintain proper records of research rationale and analysis
- Must ensure full compliance with RA Regulations and PFUTP Regulations
Important Dates
- February 13, 2024: SEBI inspection conducted
- February 21, 2024: Inspection observations communicated to Noticee
- March 04, 2024: Noticee’s initial response submitted
- July 04, 2024: Pre-enquiry show cause notice issued
- July 25, 2024: Noticee’s reply to pre-enquiry SCN
- August 13, 2024: Personal hearing conducted
- August 20, 2024: Additional submissions by Noticee
- January 27, 2025: Enquiry Report submitted by Designated Authority
- March 05, 2025: Final show cause notice issued
Impact Assessment
Regulatory Impact: This enforcement action reinforces SEBI’s strict stance against research analysts who guarantee returns or mislead clients, key violations under PFUTP Regulations. It emphasizes the importance of proper disclosure and record-keeping requirements for intermediaries.
Market Impact: Limited direct market impact as this concerns an individual research analyst. However, it serves as a deterrent for other research analysts and intermediaries regarding compliance with disclosure norms and prohibition against guaranteed returns.
Compliance Impact: Research analysts and similar intermediaries should review their practices to ensure full compliance with disclosure requirements, maintain proper documentation of research rationale, and avoid any communications that could be construed as guaranteeing returns or misleading clients.
Impact Justification
Enforcement action against individual research analyst for regulatory violations. Limited market-wide impact but demonstrates SEBI's stance on guaranteed returns and disclosure compliance.