Only six of the 218 enforcement orders, issued by Sebi during the 2013- March 2025 period under investment advisers regulations, involved registered investment advisers, that too for technical, procedural or documentation-led lapses, an analysis by the Association of Registered Investment Advisers (ARIA) showed.
In contrast, 97% of enforcement actions were directed at unregistered and registered trading call providers. The analysis showed that unregistered trading call providers were served 147 orders (67%), while registered ones engaged in intraday, derivatives, or stock-tipping activities accounted for 65 orders (30%).
Trading call providers (both registered and unregistered) accounted for 97% of all enforcement orders — comprising all 147 orders against unregistered entities and 65 orders against registered trading-call providers. “These entities were primarily engaged in intraday trading, derivatives, or stock-tipping activities,” the analysis said.
The four orders issued of FY25 against investment advisers involved no client loss and were limited to procedural non-compliance (documentation, KYC, audit, or reporting).
In December 2024, Sebi amended the Investment Advisers Regulations, 2013 to disallow trading call providers from registering as investment advisers.
“The analysis suggests that most of the enforcement under the IA Regulations has historically related to trading-call providers, rather than fiduciary investment advisory services,” said Renu Maheshwari, chairperson, ARIA. “With trading-call providers now no longer eligible for registration as investment advisers, it may be timely for the regulatory focus to evolve towards supporting genuine, client-centric fiduciary advices, while streamlining compliance obligations designed for a different context,” she said.