Description

SEBI order against Lifeinspire Knowledge Solutions Private Limited and its directors for conducting unregistered investment advisory activities through website bankniftyoption.in in violation of SEBI Act and IA Regulations 2013.

Summary

SEBI issued an order under Section 11(1), 11(4), 11(4A), 11B(1) and 11B(2) of the SEBI Act, 1992 read with Rule 5 of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995 against Lifeinspire Knowledge Solutions Private Limited (LKSPL) and its directors Shri M.S. Ahammed Ali and Shri M.S. Mohammed Ali for conducting unregistered investment advisory activities. The entities operated through website www.bankniftyoption.in and Telegram channels, offering trading advisory packages without SEBI registration as investment advisors, violating Section 12(1) of SEBI Act read with Regulation 3(1) of IA Regulations, 2013.

Key Points

  • LKSPL conducted unregistered investment advisory activities through website www.bankniftyoption.in
  • The website offered various packages for investment advisory services in securities market
  • Website displayed claim that “bankniftyoption.in is a subsidiary of LKSPL” as per news article dated February 21, 2021
  • Payment collection done through HDFC bank account and Razorpay payment gateway
  • Shri M.S. Ahammed Ali is director of LKSPL and also partner in Option Research Consultancy
  • Shri M.S. Mohammed Ali is the other director of LKSPL
  • Website used Telegram Channels for client engagement and promotional offers
  • ‘Buy Now’ tab redirected to phone numbers or telegram channels operated by LKSPL
  • LKSPL allegedly made false and misleading representations to clients through website and telegram channels
  • Activities constitute violation of Section 12(1) of SEBI Act and Regulation 3(1) of IA Regulations, 2013

Regulatory Violations

Primary Violations:

  • Violation of Section 12(1) of Securities and Exchange Board of India Act, 1992
  • Violation of Regulation 3(1) of SEBI (Investment Advisers) Regulations, 2013
  • Conducting investment advisory services without SEBI registration
  • Making false and misleading representations to clients

Entities Involved:

  1. Lifeinspire Knowledge Solutions Private Limited (PAN: AAECL3050A)
  2. Shri M.S. Ahammed Ali (PAN: DDMPA2078A)
  3. Shri M.S. Mohammed Ali (PAN: FPKPM0819D)

Compliance Requirements

  • Investment advisory services in securities market require mandatory registration with SEBI under IA Regulations, 2013
  • Entities providing investment advice for consideration must obtain SEBI registration before commencing operations
  • Website and digital platforms used for advisory services must comply with regulatory requirements
  • Payment gateways and bank accounts used for advisory fees must be linked to registered entities only
  • Prohibition on making false or misleading claims regarding trading tips or advisory services

Important Dates

  • February 21, 2021: News article date mentioned on website claiming bankniftyoption.in as LKSPL subsidiary
  • Order Reference: QJA/MN/SRO/SRO-DIV-III/31745/2025-26

Impact Assessment

Investor Protection: The order reinforces SEBI’s commitment to protecting investors from unregistered investment advisors who may provide unsuitable advice without regulatory oversight.

Market Integrity: Action against unregistered advisory activities helps maintain market integrity by ensuring only qualified and registered entities provide investment advice.

Digital Platforms: The case highlights regulatory scrutiny on digital platforms including websites and Telegram channels used for investment advisory services.

Precedent Value: Sets precedent for enforcement against entities using digital channels and payment gateways to conduct unregistered advisory activities.

Industry Impact: Serves as warning to unregistered entities providing investment advisory services through online platforms to obtain proper SEBI registration or cease operations.

Impact Justification

Enforcement action against unregistered investment advisory activities. Important for regulatory compliance and investor protection but limited to specific entities without broader market impact.