Investment Adviser Prerna Sharma’s Registration Cancelled by SEBI

Moneylife Digital Team 12 June 2026

Investor Interest

Market regulator Securities and Exchange Board of India (SEBI) has cancelled the registration of Rajasthan-based investment adviser (IA) Prerna Sharma after finding multiple regulatory violations, including the absence of mandatory National Institute of Securities Markets (NISM) certifications and failure to comply with periodic reporting requirements.

Ms Sharma had been registered as an individual IA with SEBI since March 2017. In July 2025, the Bombay Stock Exchange (BSE) conducted an on-site inspection of Ms Sharma's office. BSE shared its observations with SEBI, which subsequently initiated summary proceedings against the adviser.

Based on the inspection findings, SEBI issued a show-cause notice (SCN) in February 2026 asking Ms Sharma to explain why her registration should not be cancelled. The regulator examined her written submissions, along with the material on record, before arriving at its decision.

One of the key violations pertained to the expiry of Ms Sharma's NISM Series X-A (IA Level 1) and Series X-B (IA Level 2) certifications in September and December 2021, respectively. As the principal officer and compliance officer of her advisory practice, she was required to maintain valid certifications at all times under SEBI regulations.

In her reply, Ms Sharma admitted that the certifications had expired but stated that she had not undertaken any investment advisory activity or onboarded any clients since 2021. SEBI rejected the defence, observing that investment advisers are required to obtain fresh certifications before their existing certifications expire, regardless of whether they are actively conducting business.

The regulator also found that Ms Sharma failed to submit mandatory half-yearly reports for the periods ending 31 March 2024 and 30 September 2024. These reports must be filed with the Investment Adviser Administration and Supervisory Body (IAASB), a role currently performed by BSE.

Ms Sharma argued that there were no active clients, transactions, income or advisory activities during the relevant periods and therefore no reports were filed. She subsequently submitted the reports after the lapse was highlighted. However, SEBI held that the reporting requirement is mandatory and applies even when there is no business activity to report.

SEBI emphasised that valid NISM certifications and timely submission of periodic reports are critical safeguards for investor protection, transparency and regulatory oversight. The regulator noted that the violations committed by Ms Sharma were not merely procedural lapses but serious breaches of the regulatory framework governing investment advisers.

During the proceedings, Ms Sharma sought voluntary surrender of her registration, stating that she did not intend to continue as a SEBI-registered IA. SEBI was unconvinced, observing that she had waited until after the inspection and enforcement action before expressing such intent.

Consequently, the regulator cancelled her registration with immediate effect, while clarifying that she remains liable for any past violations and compliance obligations arising from her tenure as a registered IA.

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