Profit Vista Financial Research's Registration Suspended for 6 Months

Moneylife Digital Team 10 March 2025

Investor Interest

Market regulator Securities and Exchange Board of India (SEBI) has imposed a six-month suspension on the certificate of registration (CoR) of Profit Vista Financial Research, led by proprietor Gaurav Agrawal, due to various regulatory violations.

In an order, Amarjeet Singh, whole-time member (WTM) of SEBI, says, "Considering the violations on the part of Profit Vista Financial Research, I am inclined to agree with the recommendation made by the designated authority (DA) and find that the suspension of the certificate of the noticee for a period of six months as recommended by the DA would be commensurate with the violations committed by Profit Vista Financial Research."

SEBI's inspection, prompted by an enquiry report on 7 August 2024, revealed that Profit Vista Financial Research failed to comply with SEBI regulations, including the SEBI IA Regulations 2013 and the SEBI Intermediaries Regulations 2008. Despite repeated requests, Mr Agrawal's firm showed a lack of cooperation, with delays and failure to provide required documents, indicating non-compliance with regulatory obligations.

A key violation involved the firm failure to resolve complaints lodged by clients on the SEBI SCORES platform which is designed to protect investors' interests. While some complaints were eventually resolved, the delays were considered unacceptable by the market regulator.

Another significant violation was the qualification status of 46 employees involved in investment advisory activities. According to SEBI regulations, individuals associated with investment advice must hold the necessary certifications and qualifications, but many employees at Profit Vista failed to meet these requirements, which directly contravened SEBI guidelines.

Additionally, Profit Vista Financial Research did not provide critical information required by SEBI during the inspection. Documents such as the net-worth certificate, client records and details of the investment advice provided were either incomplete or not submitted at all.

During the inspection, the team also found that the firm's registered office was closed on multiple occasions, further obstructing the completion of the inspection. This non-cooperation with the inspection team added to the violations and was deemed to be in violation of SEBI's regulatory requirements.

In his defence, Mr Agrawal stated that many of the issues arose due to the closure of his firm in late 2021. He explained that the delays in submitting the required documents were caused by operational shutdowns, including the death of his chartered accountant (CA) which resulted in a lack of necessary certifications.

Mr Agrawal also argued that certain client complaints were filed after the firm ceased operations, making it impossible to process them. However, SEBI rejected these defences, stating that as a registered IA, Mr Agrawal was obligated to inform SEBI about the closure of his business and ensure that compliance requirements were met before shutting down operations.

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