Sebi pulls up two unregistered advisories in Vadodara and Udaipur, asks them to stop illegal activity immediately

The market regulator has been issuing such warning letters to unregistered advisors over the past few months, in what seems like a new tactic to crackdown on this ever-growing menace.

Two unregistered investment advisors have been issued a warning letter by the market regulator.

The western regional office of Securities and Exchange Board of India (Sebi) has issued two letters dated June 4 to Navin Sarwar of Udaipur, Rajasthan, and Pradipkumar Dhobi of Vadodara, Gujarat, warning them against continuing to provide investment-advisory related services without proper registration.

The letter to Sarwar read: "It has come to our notice that Shri Navin Sarwar, was involved in providing unregistered investment advisory related services in securities market without obtaining registration from SEBI under the capacity of Investment Advisor. The said unregistered activity was in violation of various provisions/Sections of SEBI Act, 1992, SEBI Regulations, Rules and Circulars made thereunder."

Also read: Is Sebi trying a new tactic to crack down on unregistered advisories?

It added that the activity "has been viewed very seriously and you are therefore warned to be careful in future and not to indulge in any kind of unregistered securities market related activity, failing which action may be initated in accordance with provisions of SEBI Act, 1992 and Regulations, Rules and Circulars made thereunder".

A similar letter has been issued to Vadodara's Dhobi.

The market regulator has been issuing such warning letters to unregistered advisors over the past few months, in what seems like a new tactic to crackdown on this ever-growing menace.

Usually, the regulator initiates an investigation into such activities and passes an order that imposes relevant penalties and restrictions.

In an earlier interaction about this, a legal expert told Moneycontrol that such warning letters are issued for cases that fall under Sebi (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations and Sebi (Prohibition of Insider Trading) Regulations, when they fall beneath a certain threshold. But even the expert hadn't seen this being followed by the regulator for cases that come under Investment Advisor (IA) Regulations, which seems a more recent course of action.