The Securities and Exchange Board of India (SEBI) has ordered regulated entities, including stock exchanges and depositories, to sever ties with unregistered investment advisors. The mandate is part of a broader crackdown on unauthorized securities advisory services and false performance claims.

In its latest directive, SEBI has asked all regulated entities to terminate contracts with unregistered advisors within 3 months, setting a deadline for compliance by January 2024. The move is part of efforts aimed at protecting the interests of investors and strengthening regulatory oversight of entities. use unauthorized counseling services.

“These regulations provide in particular that persons regulated by the Council (including recognized stock exchanges, clearing companies and depositories) and agents of such persons shall not have any direct or indirect association with any other person who – ( i) provides advice or recommendations, directly or indirectly, with respect to or relating to one or more securities, unless the person is registered or otherwise authorized by the Council to provide such advice or recommendations or (ii ) makes any claim regarding returns or performance, expressly or impliedly, “with respect to or relating to any security or securities, unless the person has been authorized by the Board to make such a claim”; , the market regulator said in the circular.

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SEBI has also strengthened rules to prevent entities from making unverified claims regarding investment returns. SEBI has prohibited regulated organizations from associating with persons or entities that are not registered under the Securities and Exchange Board of India (Investment Advisers) Regulations, 2013.

The move follows SEBI’s ongoing review of illegal market practices, aimed at protecting investors from potential fraud and ensuring that only authorized advisors are allowed to operate in financial markets.

#FlashNews | #SEBI directs regulated entities to terminate their relationships with unregistered investment advisers and requires the termination of contracts with unauthorized securities applicants within three months.

SEBI tightens rules on entities engaging in unauthorized yield performance claims pic.twitter.com/E5PX8W4LvM

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