Role of Company Secretaries - SEBI Cancels 68 Investment Adviser Registrations: A Wake-Up Call on Compliance Discipline.

SEBI Cancels 68 Investment Adviser Registrations: A Wake-Up Call on Compliance Discipline

In a significant regulatory sweep, the Securities and Exchange Board of India (SEBI) has cancelled the registrations of 68 investment advisers (IAs) after they failed to meet mandatory compliance requirements—most notably, non-payment of renewal fees required to maintain their licences.

This marks one of SEBI’s largest compliance crackdowns in recent years, underscoring the regulator’s increasing focus on strengthening investor protection and maintaining the integrity of the advisory ecosystem.

Why SEBI Took Action?

Under the SEBI (Investment Advisers) Regulations, 2013, every Registered Investment Adviser (RIA) must:

• Renew their registration every five years, and

• Pay the prescribed renewal fee within the required timeframe.

All 68 advisers failed to pay their renewal fees despite multiple reminders, leading to their certificates lapsing in violation of regulatory norms.

This is not just an administrative lapse—it directly impacts the transparency and reliability of the advisory industry. Incomplete or outdated registrations can create opportunities for:

• Misuse of credentials,

• Impersonation of inactive advisers, and

• Unregulated advisory activities.

Abhishek Kumar, founder and chief investment adviser at Sahaj Money, noted that the move is part of SEBI’s effort to ensure a “credible, accurate, and investor-friendly RIA register.”

Step-by-Step Enforcement: How SEBI Reached the Decision

SEBI undertook a multi-stage compliance exercise earlier this year:

1. Physical show-cause notices were issued between February and June 2025.Many were returned undelivered.

2. SEBI then issued electronic notices via registered email IDs in August and September.Service of notices was treated as complete.

3. Only 17 advisers responded, requesting voluntary cancellation.

4. The remaining 51 advisers did not reply, triggering automatic cancellation of their registrations.

The 68 cancelled entities span proprietorships, LLPs and private limited companies, including well-known names such as:

• TrueNorth Labs Pvt. Ltd

• Equity Mantra

• Getbasis Securities and Technologies India Pvt. Ltd

• Lucid Technologies

• Avenue Venture Partners Investment Adviser LLP

This highlights that compliance lapses can impact players across the spectrum—large, small, established, or emerging.

Part of a Larger Compliance Clean-Up

This move is not isolated.

In recent months, SEBI has intensified actions against research analysts, advisory firms, and other intermediariesfor:

• Non-payment of fees

• Non-disclosure of conflicts of interest

• Failure to maintain proper records

• Non-compliance with procedural and reporting norms

The regulator is making it clear: the advisory landscape must operate with discipline, transparency, and regulatory accountability.

What This Means for Investment Advisers: Key Compliance Requirements

For any existing or aspiring RIA, this episode reinforces the importance of strict compliance. Core obligations under SEBI's IA regulations include:

1. Mandatory Registration Renewal

• Renewal every five years.

• Timely payment of renewal fees.

• Updated documents and self-certifications.

2. Fit and Proper Criteria

Advisers must maintain:

• Clean financial and legal track record

• No involvement in fraud or moral turpitude

• Adequate professional qualifications and certifications

3. Reporting & Disclosure Requirements

RIAs must regularly update clients and SEBI on:

• Fees and compensation

• Conflicts of interest

• Changes in ownership, structure, or control

4. Client-Level Compliance

• Maintain KYC records

• Document risk profiling and suitability assessment

• Provide investment advice strictly aligned with client interests

5. Record-Keeping

Advisers must maintain comprehensive records of:

• Client interactions

• Risk assessments

• Advisory rationalefor a minimum of five years.

6. Grievance Redressal & Audit

• Maintain a dedicated grievance reporting mechanism

• Conduct periodic compliance audits

• Rectify gaps identified by auditors

7. Use of Proper Communication Channels

• Only use official communication and advisory platforms

• Avoid social media “unregistered advice” traps

• Ensure compliance with SEBI’s advertisement code

The Takeaway: Compliance Is Not Optional

SEBI’s cancellation of 68 investment adviser registrations sends a powerful message:

Regulatory compliance is a fundamental obligation—not a formality.

For advisers, it’s a reminder that trust is not only built on good advice, but on credible, compliant, and transparent operations.

For investors, it reinforces SEBI’s commitment to protecting their interests by ensuring only active, authorised, and accountable advisers operate in the market.

As India’s financial advisory landscape grows, regulatory discipline will remain central to creating a safe and trustworthy ecosystem for retail and institutional investors alike.