Capital markets regulator SEBI on Thursday cancelled the registration of 72 entities as research analysts after they failed to pay the required renewal fees, rendering their certificates of registration invalid. The regulator said that the 'main purpose of cancellation of certificate of registration, as research analyst, of the noticees (72 entities) is to prevent the misuse of their expired certificate of registration with SEBI on unaware investors'.
The Securities and Exchange Board of India initiated summary proceedings under the intermediaries rules against these noticees after they failed to pay the renewal fees as required under the market norms.
Thereafter, the regulator sent show cause notices in February this year to the noticees for the violations.
"...the noticees are registered with SEBI as research analysts and are holding SEBI certificate of registration under the SEBI (Research Analyst) regulation, 2014," the regulator said in the order.
As per SEBI norms, every registered research analyst is required to pay the renewal fee every five years from the date of grant of registration from the markets watchdog to keep the registration in force.
However, the regulator found that these 72 entities have not paid the renewal fees and their certificates of registration as a research analyst have expired.
Accordingly, these entities have flouted the intermediaries rules.
"...I, in exercise of the powers...of the intermediaries regulations, 2008, hereby, cancel the certificate of registration of research analyst of noticee No.1 to 72," SEBI's Chief General Manager Bithin Mahanta said in the order.
Also, the regulator directed the 72 entities to maintain and preserve records and other documents related to redressal of investor grievances, transfer of records, funds or securities of their clients.
Meanwhile, in seven separate orders on Thursday, SEBI slapped a fine of Rs 5 lakh each on Sahadev Paik HUF, Paritosh Saha HUF, Tripta Shroff and Daksh Share Brokers for indulging in non-genuine trades in the illiquid stock options segment on the BSE.
Abhishek Gupta, Faithful Cloth Merchants Pvt Ltd, and Bajaj Pratisthan Pvt Ltd were the other entities who have penalised by the markets watchdog.
The orders came after the Securities and Exchange Board of India observed large-scale reversal of trades in the illiquid stock options segment of BSE, leading to the creation of artificial volume.
Thereafter, SEBI conducted a probe into the trading activities of certain entities in illiquid stock options on BSE for the period from April 2014 to September 2015.
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