SEBI Cancels Registration of 10 Research Analysts Over Failure to Pay Mandatory Renewal Fees

SEBI Cancels Registration of 10 Research Analysts Over Failure to Pay Mandatory Renewal Fees​

The Securities and Exchange Board of India (SEBI) has passed a significant order, immediately cancelling the registration certificates of ten research analysts following their failure to comply with mandatory renewal fee requirements stipulated under regulatory guidelines. The decisive action was taken in light of non-payment of the five-yearly fees required to keep the registration active.

SEBI Mandates Renewal Fees for Research Analysts​

As per SEBI (Research Analysts) Regulations, 2014, all registered research analysts are mandated to pay a renewal fee every five years from the date of their initial grant of registration. This requirement is a critical component designed to ensure the ongoing compliance and commitment of individuals and firms operating in the financial advisory space.

The SEBI Act, 1992 read with the Intermediaries Regulations, 2008, grants the Board the power to suspend or cancel certificates of registration when regulatory duties are not performed. The noticees failed to adhere to this fundamental provision of the regulations.

Summary Proceedings and Findings Against Noticees​

SEBI initiated Summary Proceedings under Regulation 30A of the SEBI (Intermediaries) Regulations, 2008, against the ten entities/individuals listed in the order. These proceedings were commenced after notices were issued to the noticees on February 03, 2025, and subsequent dates, requiring submissions as to why their registration should not be cancelled or suspended.

The registered individuals and firms found non-compliant included IMTIAZ REHMAN MERCHANT (Registration No. INH000001683) and INGOVERN RESEARCH SERVICES PRIVATE LTD (Registration No. INH200002754), among others. The required payment for their registration certificates remained unpaid since dates ranging from September 08, 2020, to April 05, 2024, depending on the analyst's date of initial registration.

Cancellation Order Details and Regulatory Basis​

The SEBI order confirmed that the procedure for cancellation, as required by the Intermediaries Regulations, 2008, had been duly followed. Since the certificates of registration had expired due to non-payment, the designated authority found it appropriate under Section 12(3) of the SEBI Act, 1992, to cancel these registrations.

The primary objective stated by the regulator for this cancellation is to prevent the misuse of their inactive certificates by unaware investors. The order directed that notwithstanding the immediate cancellation, all ten Noticees shall continue to be liable for any action or omission done while registered as Research Analysts.

Obligations Post-Cancellation​

The noticees are now subject to several crucial post-cancellation obligations laid down in the SEBI Order. They must ensure the proper maintenance and preservation of relevant records and documents required by regulations. This includes ensuring the redressal of investor grievances, continuity of service to their clients, and necessary actions concerning any pending defaults.

The cancellation order comes into force immediately, meaning that the services provided by these registered analysts are officially subject to this regulatory action. All affected parties have been advised to ensure compliance with Regulation 30A (10) of the Intermediaries Regulations, 2008.