Thu Jan 30 09:19:36 UTC 2025: ## SEBI Cracks Down on Unauthorized Investment Advice: No Payments or Client Data Sharing Allowed
**Mumbai, [Date]** – The Securities and Exchange Board of India (SEBI) issued a stern warning on Wednesday, clarifying that registered intermediaries are strictly prohibited from associating with individuals or entities offering unauthorized investment advice or guaranteeing returns on securities. This follows recent updates to the SEBI (Intermediaries) Regulations, 2024, published on August 29th.
In a detailed FAQ document, SEBI emphasized that any payment exchange, client referral, or sharing of client information with such unauthorized parties constitutes an impermissible association. This includes even indirect links or sharing information between systems. The regulator clarified that “association” encompasses a broad range of relationships, including any monetary transactions.
While SEBI allows for collaboration on branding, marketing, and promotional activities with external parties, this is strictly conditional on those parties *not* being involved in providing unauthorized investment advice or making unapproved return claims.
The new regulations aim to protect investors by preventing the dissemination of misleading information and the potential for fraudulent schemes. SEBI’s clarification in the form of FAQs seeks to ensure that all registered intermediaries – including stock exchanges, clearing corporations, and depositories – and their agents fully understand and comply with these updated rules. The regulator’s actions underscore its commitment to maintaining the integrity and transparency of the Indian securities market.
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