- SEBI cancelled registrations of 11 research analysts for non-payment of renewal fees
- The move aims to remove inactive intermediaries and prevent misuse of expired licenses
- Entities include firms like 24 Carat Financial Services and seven individual analysts
India's capital markets regulator has cancelled the registrations of 11 research analysts after they failed to pay mandatory renewal fees, in a move aimed at removing inactive intermediaries and preventing misuse of expired regulatory licences.
The Securities and Exchange Board of India (SEBI) said the purpose of the cancellations is to prevent the misuse of research analyst registration certificates that are no longer valid, ensuring that only entities with active registrations continue to operate in the securities market.
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In an order issued on Tuesday, SEBI said the registrations of the research analysts had ceased to remain in force after they failed to pay the renewal fee required every five years under the SEBI (Research Analysts) Regulations, 2014.
The entities whose registrations have been cancelled include 24 Carat Financial Services, Lakshmishree Investment & Securities Pvt. Ltd., PCS Securities Ltd. and Bansal Finstock Pvt. Ltd., along with seven individual research analysts.
According to the order, the renewal fees had remained unpaid for varying periods, with some defaults dating back to 2020. SEBI initiated summary proceedings under the Intermediaries Regulations and issued notices asking the entities to explain why their registrations should not be suspended or cancelled.
Three of the noticees did not respond to the notices, while the remaining eight informed the regulator that their registrations could be cancelled.
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SEBI said that since the mandatory renewal fees had not been paid, the registrations had already ceased to be in force and were liable to be cancelled under Section 12(3) of the SEBI Act read with Regulation 30A of the SEBI (Intermediaries) Regulations.
The regulator clarified that cancellation of registration does not extinguish any liability arising from acts or omissions while the entities were registered as research analysts. It directed the entities to preserve records, address pending investor grievances, transfer client records, funds or securities where required, and ensure continuity of obligations.
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