In India, financial markets play a critical role in economic growth. To ensure investors are protected and market practices remain fair, the Securities and Exchange Board of India (SEBI) acts as a watchdog. One of its key responsibilities is monitoring and regulating advisory services that guide investors on buying or selling shares. SEBI Registered Advisory firms must follow strict rules to ensure they do not mislead or exploit investors.

Advisory misconduct is emerging as a major concern, especially with the rise of social media influencers and unregistered individuals giving stock tips. At times, sudden fluctuations in stock prices have triggered doubts about the credibility of such advice. For instance, investors monitoring Exide share price may find it difficult to trust the information they receive. This is where the role of SEBI becomes vital—to uphold market integrity and shield retail investors from misleading or unverified recommendations.

What Is SEBI and Its Role?

SEBI was established in 1992 to regulate India’s securities markets. Its mission is to protect investors’ interests and develop the capital market while ensuring fairness and transparency. One of SEBI’s key tasks is to register and regulate investment advisers, portfolio managers, and research analysts.

SEBI Registered Advisory entities must meet eligibility criteria, disclose conflicts of interest, and follow a code of conduct. These measures ensure that the advice investors receive is based on research and free from personal gain motives.

Advisory Misconduct: What It Means

Advisory misconduct refers to unethical or illegal behavior by financial advisers. This includes:

  • Giving false or misleading investment advice
  • Guaranteeing returns, which is illegal
  • Failing to disclose personal interests in recommended stocks
  • Operating without SEBI registration
  • Charging high fees without delivering promised services

Such misconduct can cause investors to lose money and trust in the financial system.

SEBI’s Actions Against Misconduct

SEBI has taken strict steps to discipline individuals and companies involved in advisory misconduct. Some of the actions include:

  1. Banning Unregistered Advisers
     SEBI regularly publishes a list of entities that are not authorized to provide financial advice. They are barred from offering investment tips or recommendations.
  2. Imposing Penalties
     SEBI can impose fines and recover illegal gains made by violators. In several high-profile cases, hefty penalties have been charged to deter future misconduct.
  3. Issuing Public Warnings
    SEBI issues press releases and public notices warning investors not to deal with certain advisers.
  4. Refund Orders
     SEBI can order wrongdoers to refund money taken from investors under false promises.
  5. Freezing Bank Accounts
     In serious cases, SEBI has the power to freeze bank accounts of fraudulent entities to recover investor funds.

Recent Examples of SEBI’s Crackdown

Over the past few years, SEBI has taken action against numerous advisory firms and individuals. For instance, SEBI penalized certain social media influencers for giving stock advice without being registered. These influencers were found to be manipulating stock prices and profiting from the unsuspecting public.

SEBI’s Guidelines for Investors

To prevent being misled, SEBI advises investors to:

  • Always deal with SEBI Registered Advisory services
  • Avoid tips from Telegram or WhatsApp groups that promise quick profits
  • Verify the registration number of an adviser on SEBI’s website
  • Never fall for schemes that guarantee returns
  • Read all documents carefully before investing

These steps can help investors stay safe from fraud.

The Way Forward

SEBI is continuously updating its rules to keep pace with new challenges. With technology and social media playing a larger role in investing, SEBI is working to ensure that even digital advisers follow ethical practices.

At the same time, investor education is vital. SEBI runs programs to inform people about their rights, risks in the stock market, and how to choose trustworthy advisers.

Conclusion

SEBI plays a vital role in maintaining trust in India’s financial markets. By monitoring advisory misconduct and taking strong action, SEBI protects investors from scams and ensures that only genuine SEBI Registered Advisory services operate. In a time when stock market participation is growing, and stocks draw interest, investors must be cautious and rely only on registered professionals for financial guidance. With SEBI’s continued efforts, the market can grow.