Sebi fines Star India Market Rs 40 lakh for violating investment adviser norms

Markets regulator Sebi on Wednesday imposed Rs 40 lakh fine on Star India Market Research for violating code of conduct for investment advisers.

"Noticee (Star India Market Research) by receiving payments as fees for services to be rendered in future, did not act fairly and in the best interests of its clients and did not charge its clients in a fair and reasonable manner," Sebi said while imposing fine.

Sebi carried out an inspection of investment advisory operations of the firm from April 2016 to November 2017.

Following the inspection, Sebi observed that the investment adviser provided investment advice in disregard to the risk profile of its clients and its recommendations were not based on clients' experience, risk appetite and capacity for absorbing loss.

Besides, it found that the adviser was charging fees for services to be rendered in future.

"Fees should be charged based on actual advice given, and not on future advice which is yet to be given, with a view to lure investors", Sebi said.

By doing so, Star India Market Research violated code of conduct for investment advisers, the regulator said.

"An entity acting as a registered intermediary as an investment adviser is expected to act honestly, fairly, with due skill and care in the best interests of its clients and in the integrity of the market" the regulator noted.