Major Regulatory Action: Sebi Purges 68 Investment Advisers
In one of its most significant compliance drives in recent years, the Securities and Exchange Board of India (Sebi) has cancelled the registrations of 68 investment advisers. The decisive action, ordered on Thursday, comes after these entities failed to comply with mandatory norms, specifically the non-payment of renewal fees required to maintain their licences as Registered Investment Advisers (RIAs).
The cancellation is effective immediately, forcing these firms to cease all advisory activities under their former registered status. This sweeping move is a crucial part of the market regulator's ongoing effort to clean up the industry and protect investors from potential misuse of dormant credentials.
Why Sebi Took This Strict Action
According to the Sebi (Investment Advisers) Regulations of 2013, every investment adviser must renew their registration every five years by paying a prescribed fee. The regulator revealed that all 68 entities allowed their certificates to lapse, despite receiving repeated reminders. This fundamental lapse placed them in direct violation of the regulations, triggering the formal cancellation process.
Abhishek Kumar, founder and chief investment adviser at Sahaj Money, highlighted the rationale behind the crackdown. He stated that this action helps prevent the misuse of credentials of inactive RIAs by fraudsters. "Through this, it appears Sebi aims to maintain an accurate, credible, and investor-friendly RIA register," Kumar explained.
The Multi-Stage Compliance Process
Sebi initiated a detailed compliance exercise earlier this year to identify non-compliant entities. The process began with physical show-cause notices sent between February and June 2025. A significant number of these notices were returned undelivered, indicating that many advisers were no longer operating at their registered addresses.
Following this, the regulator sent electronic notices to the email addresses on record in August and September. The service of these notices was treated as complete. Out of the 68 entities contacted, only 17 responded, seeking voluntary cancellation of their registration. The remaining 51 advisers did not reply at all, which prompted Sebi to proceed with the compulsory cancellation of their licences.
The list of cancelled advisers includes a diverse range of business structures, from proprietorships to LLPs and private-limited companies. Notable names among them are TrueNorth Labs Pvt. Ltd, Equity Mantra, Getbasis Securities and Technologies India Pvt. Ltd, Lucid Technologies, and Avenue Venture Partners Investment Adviser LLP.
Directives and Broader Clean-Up
Sebi has issued strict directives to the 68 entities. They must immediately stop identifying themselves as registered investment advisers and are prohibited from using their former registration numbers. Furthermore, they have been ordered to preserve all relevant records, resolve any pending investor complaints, and ensure the proper handling of any client funds or securities still under their management.
This action is not an isolated event but part of a broader compliance clean-up Sebi is conducting across various market intermediaries. In recent months, the regulator has taken parallel actions against research analysts and other advisory entities for similar failures, including non-payment of fees and lapses in disclosure requirements.
In September alone, Sebi cancelled the licences of 18 investment advisers for fee-related non-compliance. Earlier, in March, the watchdog cancelled the registrations of 72 research analysts who also failed to pay renewal fees despite reminders. These consecutive actions send a clear signal that the regulator will not overlook lapses in foundational obligations. According to Sebi's annual report for 2024-2025, there are over 900 registered investment advisors in India as of FY2025, making the integrity of this register paramount for market confidence.
