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To prevent investment advice as investor education, the market regulator has said that any unregistered advisor should use three months old prices to make their point.
SEBI has issued clarifications related to the individuals regulated by the boards of the market infrastructure institutes (MII) and along with the persons engaged in prohibited activities with their agents.
This would mean that SEBI, MIIS (Stock Exchange, Clearing Corporation, Depository) and their agents regulated by their agents will not have a direct or indirect relationship with any other person:
I) Regarding any security or securities or in relation to any recommendation, directly or indirectly provides advice or recommendation, as long as the person is registered or otherwise to provide such advice or recommendation to the person Is allowed
Ii) Related or related to security or securities or related, makes any claims of returns or performance, until a person is allowed by SEBI to claim such
Here are important explanations provided by SEBI on the rules:
1) Who is the ‘person regulated by the board’ for these rules?
(A) A asset management company of mutual funds registered with SEBI
(b) An alternative investment fund registered with SEBI or Investment Manager of Infrastructure Investment Trust
(c) Manager of a real estate investment trust registered with SEBI
2) Who is the agent of individuals regulated by the board?
A ‘agent’ is a person employed
Do any task for a person regulated by SEBI, or to represent a person regulated by SEBI in practice with third persons. Some examples will be an authorized person of employees, mutual fund distributors, stock brokers.
3) What are the restrictions on regulated persons by SEBI and their agents
Their association with another person?
Individuals regulated by SEBI and her agents will not have any direct or indirect relationship with any other person who are engaged in any two activities:
A) Advice or any recommendation, direct or indirectly, or with respect to
A safety or securities, without registered or otherwise without permission by SEBI
B) To make any claims regarding safety or securities without permission by SEBI, making any claim about returns or performance,
4) What is a relationship between people regulated by SEBI and their agents with another person?
‘Association’ means the price of money or money or a customer’s referral or information technology systems related to the transaction related to the transaction.
5) Is the person regulated by SEBI responsible for ensuring that individuals with whom they join are not engaged in disturbance in two prohibited activities?
Yes. It is the responsibility of individuals regulated by SEBI to ensure that any person is connected to their or their agent, directly or indirectly, directly or indirectly not engaged in any two above prohibited activities.
6) Is there any restriction on the individuals regulated by the board and their agents to join another person who engages in investor education?
Investor education is not one of the two prohibited activities under these rules.
7) Does education and advice/recommendation separate?
A person is not fully using a person engaged in education, the erstwhile three -month market price data, to display any security name Also involves using code name. Shares etc. indicate future price, advice or safety or recommendation related to securities.
9) What are the results of violation of these rules for individuals regulated by SEBI and their agents?
Action may include investigation, assistant or an order. Possible works may include fine, suspension/registration, cancellation of debact
10) Is the boards and persons regulated by their agents allow another person to associate for their branding/marketing/promotional activities?
Persons regulated by the board and their agents are allowed to associate with another person for their branding/marketing/promotional activities, provided that no other person directly or indirectly is connected in any of the above two prohibited activities yes.
11) Is there the following amount to violate under the rules?
a) Advertisement/Branding/lead generation through a marketing agency by any name.
If regulated by the person, the rules will be the same for violations
SEBI or its agent indirectly ends to join with the unit engaged in any of the two prohibited activities.
B) Association through digital platforms where there is control of a person regulated by SEBI or its agent, where any advertisement/material appears.
No. Since the person or his agent controls where his advertisement/content appears, can ensure that there is no such association.
C) Association through digital platforms where the person regulated by the board or its agent has no control over the material/unit with which it is connected.
If the person regulated by the board or its agent ends in connecting with the unit connected in any of the two prohibited activities indirectly, then the rules will be similar for violations.
12) When will these rules apply?
Regulations have been implemented since August 29, 2024. Individuals regulated by the board and their agents are advised through a circular date on October 22, 2024, if any, with individuals attached to any person above. Two prohibited activities, direct or indirectly, within three months from the date of issuing that circular.
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