Market regulator Securities and Exchange Board of India (SEBI) has imposed a penalty of ₹5 lakh on Rajiv Sharma, proprietor of Capital Life Market Research, for multiple violations of investment adviser (IA) regulations, including operating without valid National Institute of Securities Markets (NISM) certifications, deficiencies in record maintenance, failure to update know-your-customer (KYC) details and non-submission of mandatory reports.
In an
adjudication order, SEBI found that Mr Sharma continued to provide investment advisory services and collected fees of around ₹1.20 crore during FY24-25 despite his mandatory NISM Series X-A and X-B certifications having expired in April 2024. The certifications were renewed only in February and April 2026.
SEBI observed that the IA had failed to appear for certification examinations several times and had also failed multiple attempts. The regulator rejected his argument that personal and financial hardships prevented him from renewing the certifications, noting that he continued to provide advisory services and earn substantial fees during the same period.
The regulator also identified several deficiencies in record maintenance and compliance processes. These included failure to submit the annual compliance audit report for FY23-24, failure to submit the half-yearly periodic reports for March 2024 and September 2024, failure to update KYC details for five clients on the CVL-KRA portal, and incomplete client records lacking PAN details, risk scores, and signed rationale for investment advice.
During the proceedings, Mr Sharma argued that client records stored on an external hard disk became inaccessible after the device crashed and that some physical records were misplaced during an office relocation. He also cited technical issues with the KRA system and personal hardships, including his son's medical issues, as reasons for the compliance failures.
However, SEBI rejected these explanations, stating that registered intermediaries are expected to maintain proper data backup infrastructure and cannot rely on vague technical impediments to justify non-compliance. The regulator noted that reliance on a single external hard drive without a secondary backup represented a ‘clear and serious failure’ of record maintenance obligations.
At the same time, SEBI gave Mr Sharma the benefit of doubt on one allegation relating to failure to maintain an arm’s-length relationship between advisory activities and personal financial dealings. The regulator held that routing personal loans through the same bank account used for advisory business did not, in itself, establish a conflict of interest or regulatory breach, absent evidence of biased advice or harm to clients.
While determining the penalty, SEBI said there was no evidence of disproportionate gain or investor loss and also noted that the violations were not repetitive in nature. The regulator considered Mr Sharma’s subsequent completion of the required NISM certifications as a mitigating factor before imposing the ₹5 lakh penalty.
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