Authority: Medha Sonparote, Adjudicating Officer, Securities and Exchange Board of India (SEBI)

Order Date: October 22, 2026

Case Overview

This adjudication order stems from proceedings initiated by SEBI against Mr. Rishabh Tanwar (PAN: APWPT2161E, SEBI Registration No.: INH100009293), a SEBI-registered Research Analyst. The case was based on an inter-governmental reference alleging that an entity associated with Mr. Tanwar was running a share trading call center in possible violation of SEBI regulations. A subsequent inspection for the period April 1, 2023, to October 31, 2024, revealed multiple violations of the SEBI (Research Analysts) Regulations, 2014, and the SEBI Master Circular dated May 21, 2024.

The Noticee admitted to all six violations outlined in the Show Cause Notice (SCN) dated September 4, 2026. The core of the violations involved an outsourcing arrangement with a third-party service provider, Mr. Govind Mohanrao Surnar. The principal allegations were that Mr. Tanwar outsourced core business activities—specifically KYC and client grievance handling—without a valid agreement, without a formal outsourcing policy, without conducting adequate due diligence, and without maintaining required contingency plans. This led to the loss of KYC records for 471 out of 509 clients. Furthermore, he failed to display monthly complaint statuses on his website as mandated.

The Noticee, appearing as an individual proprietor without dedicated compliance staff, attributed the lapses to inexperience and overreliance on the service provider. He fully cooperated with the investigation, admitted to the violations, and highlighted several mitigating factors. These included voluntarily discontinuing the outsourcing arrangement in July 2024, formulating an outsourcing policy in July 2025, applying to surrender his Research Analyst registration on September 15, 2025, and earning no income from the activities since October 2024. He emphasized that the arrangement was not dishonest and caused no demonstrable loss to investors.

Financial details revealed that the total revenue generated from clients onboarded by the service provider was ₹1,09,86,597. Of this, ₹98,29,709 (approximately 90%) was paid to the service provider, leaving the Noticee with a net retention of approximately ₹10,91,889 after accounting for professional fees and other direct costs.

Final Outcome

The Adjudicating Officer found the Noticee guilty of violating:

  • Regulations 13(i) and 24(2) read with Clauses 1, 2, and 7 of the Code of Conduct (Third Schedule) of the SEBI (Research Analysts) Regulations, 2014.
  • Paras 1, 2, 4, 5, and 6 of Annexure E (Principles for Outsourcing) under Clause 10.4 of the Master Circular.
  • Clauses 5.3 and 10.5 of the Master Circular.

Considering the factors under Section 15J of the SEBI Act, 1992—including the nature of the violations, the admitted lapses, the absence of investor loss, and the corrective measures taken—a consolidated penalty of ₹6,00,000 (Six Lakh Rupees) was imposed under Section 15EB of the SEBI Act. The penalty must be paid within 45 days of receipt of the order, failing which SEBI may initiate recovery proceedings.

Topics: SEBI Enforcement, Research Analyst Compliance, Outsourcing Regulations