Description

SEBI order under Section 12(3) against Winway Research (Proprietor: Ankur Jain) for violations including operating without proper registration, charging undisclosed fees, accepting payments in irregular accounts, and non-compliance with Investment Adviser regulations.

Summary

SEBI issued an enquiry order under Section 12(3) of the SEBI Act, 1992 against Winway Research (Registration No. INA000007492), proprietor Mr. Ankur Jain, a registered Investment Adviser. The order, referenced as WTM/AS/WRO/WRO/31986/2025-26, follows complaints received on the SCORES portal and a Designated Authority enquiry report dated November 18, 2024. The noticee faces multiple allegations of violating Investment Adviser Regulations, Intermediaries Regulations, and PFUTP Regulations.

Key Points

  • SEBI initiated proceedings based on complaints filed through the SCORES portal against the registered Investment Adviser
  • Three main categories of violations identified: registration non-compliance, irregular payment practices, and undisclosed fee structures
  • Violations span multiple regulatory frameworks including IA Regulations 2013, PFUTP Regulations 2003, and Intermediaries Regulations 2008
  • Designated Authority submitted enquiry report on November 18, 2024
  • Order issued under Regulation 27 of SEBI (Intermediaries) Regulations, 2008

Regulatory Violations

1. Registration Non-Compliance:

  • Failed to apply for registration as a non-individual Investment Adviser
  • Violated Paragraph 2(v)(a) and 2(v)(c) of SEBI Circular SEBI/HO/IMD/DF1/CIR/P/2020/182 dated September 23, 2020
  • Breached Clause 8 of Code of Conduct for Investment Advisers (Third Schedule of IA Regulations)

2. Irregular Payment Practices:

  • Insisted clients make payments from bank accounts of relatives
  • Accepted money in different personal bank accounts belonging to other persons
  • Violated Regulation 3(d), 4(1) and 4(2)(o) of PFUTP Regulations read with Section 12A(c) of SEBI Act
  • Breached Regulation 15(2) of IA Regulations
  • Charged fees from complainant Mr. Shyam Kumar Kandukuri for same product during overlapping durations
  • Violated Regulation 15(1) and (9) of IA Regulations read with Clauses 1, 2 and 6 of Code of Conduct

3. Undisclosed Fees and Agreement Violations:

  • Issued invoices for payments not mentioned in agreements with complainants
  • Failed to enter into proper agreements with clients regarding various fees charged
  • Violated Paragraph 2(ii)(a) and 2(ii)(c) of 2020 Circular
  • Breached Regulation 19(1)(d) of IA Regulations read with Clauses 1 and 8 of Code of Conduct
  • Non-compliance with Regulation 15(9) of IA Regulations

Compliance Requirements

Investment Advisers must:

  • Apply for appropriate registration category (individual vs. non-individual)
  • Accept payments only in designated bank accounts as per regulatory requirements
  • Maintain transparent fee structures disclosed in client agreements
  • Avoid charging duplicate fees for overlapping service periods
  • Issue invoices consistent with signed agreements
  • Enter into written agreements covering all fees and charges
  • Comply with Code of Conduct provisions including transparency and fair dealing

Important Dates

  • November 18, 2024: Designated Authority submitted enquiry report
  • January 21, 2026: Order issued (inferred from circular ID date)
  • September 23, 2020: Reference circular (SEBI/HO/IMD/DF1/CIR/P/2020/182) issued

Impact Assessment

Industry Impact: This enforcement action reinforces SEBI’s oversight of Investment Advisers and demonstrates consequences for non-compliance with registration, fee disclosure, and payment collection norms. The case highlights common violation areas including improper entity structuring, opaque fee practices, and irregular fund collection methods.

Investor Protection: The order protects retail investors by addressing complaints of irregular payment demands, undisclosed charges, and duplicate fee collection. It emphasizes the importance of formal agreements and transparent fee structures in the investment advisory business.

Regulatory Precedent: Establishes clear expectations for Investment Advisers regarding proper registration classification, maintaining compliant payment channels, avoiding fee manipulation, and ensuring all charges are documented in client agreements per the 2020 Circular requirements.

Impact Justification

Enforcement action against a single investment adviser for regulatory violations. Limited market-wide impact but demonstrates SEBI's regulatory oversight of intermediaries.