Description

SEBI order under Section 12(3) of SEBI Act, 1992 against registered Investment Adviser Podium Market Research for violations including breach of confidentiality and unauthorized GST collection.

Summary

SEBI issued an order under Section 12(3) of the SEBI Act, 1992 read with Regulation 27 of the Intermediaries Regulations, 2008 against Podium Market Research (Proprietor: Mr. Suman Kumar), a registered Investment Adviser (Registration No. INA300011706). The proceedings originated from complaints received on SEBI SCORES Portal and subsequent enquiry by the Designated Authority dated August 21, 2024.

Key Points

  • Noticee is a SEBI-registered Investment Adviser under registration number INA300011706
  • Proceedings initiated based on complaints received on SEBI SCORES Portal
  • Designated Authority issued show-cause notice on May 16, 2024 (emailed May 22, 2024)
  • Noticee submitted reply on June 30, 2024 and personal hearing was granted on July 19, 2024
  • Two primary violations alleged under IA Regulations and PFUTP Regulations

Regulatory Violations Alleged

Violation 1: Breach of Confidentiality

  • Allegation: Failed to maintain due care and diligence in maintaining confidentiality of information pertaining to SCORES complainants
  • Applicable Provisions: Regulation 15(9) of IA Regulations read with Clause 1, 2 & 4 of Code of Conduct in Third Schedule of IA Regulations

Violation 2: Unauthorized GST Collection

  • Allegation: Collection of GST from clients during FY 2018-19 and 2019-20 without having GST registration
  • Applicable Provisions: Regulation 3(d) and Regulation 4(2)(p) of PFUTP Regulations read with Clause 1, 5 & 8 of Code of Conduct under Third Schedule of IA Regulations

Compliance Requirements

  • Investment Advisers must maintain strict confidentiality of client information as per Code of Conduct
  • Intermediaries must not collect GST from clients without proper GST registration
  • Compliance with IA Regulations’ Third Schedule Code of Conduct is mandatory
  • Adherence to PFUTP Regulations prohibiting fraudulent and unfair trade practices

Important Dates

  • August 21, 2024: Enquiry Report submitted by Designated Authority
  • May 16, 2024: Show-cause notice issued
  • May 22, 2024: DA SCN emailed to Noticee
  • June 28, 2024: Noticee’s reply dated
  • June 30, 2024: Reply submitted via email
  • July 19, 2024: Personal hearing granted
  • FY 2018-19 and 2019-20: Period during which unauthorized GST collection occurred

Impact Assessment

This enforcement action demonstrates SEBI’s continued scrutiny of Investment Advisers’ compliance with regulatory requirements, particularly regarding client confidentiality and proper tax compliance. The order serves as a reminder to all registered Investment Advisers to:

  1. Maintain strict confidentiality protocols for client information
  2. Ensure proper registration and compliance with tax laws before collecting GST
  3. Adhere to the Code of Conduct specified in the Third Schedule of IA Regulations

The impact is primarily limited to the specific intermediary involved, but sets a precedent for enforcement actions against similar violations by other Investment Advisers. Market participants should note SEBI’s focus on both regulatory compliance and client protection measures.

Impact Justification

Enforcement action against a single investment adviser for procedural violations. Limited market-wide impact but important for IA compliance standards.