SEBI: What It Regulates and Who Needs Registration

SEBI regulates India’s securities market and the intermediaries working in it. Under Section 12 of the SEBI Act, stock brokers, investment advisers, portfolio managers and similar intermediaries must hold a SEBI certificate of registration before they deal in securities or offer these services.

Why it matters

People sometimes start giving stock tips or managing client money informally. That can be treated as unregistered activity. A recent SEBI order dealt with exactly this: a person who ran tip-based advice and profit-sharing account handling without registration, and collected lakhs of rupees from clients. If you plan a market-facing business, start with SEBI registration.

Who needs which registration

• Brokerage business: stock broker registration.
• Running funds: mutual fund registration.
• Managing client portfolios: PMS registration.
• Pooled investment vehicles: AIF registration.
• Paid investment advice: investment adviser registration.
• Published research on securities: research analyst registration.

SEBI’s list of intermediaries also includes merchant bankers, underwriters, debenture trustees, registrars and bankers to an issue.

How to approach it

Registration is the gate, and the rules that follow it (disclosures, conduct norms, periodic compliance) are ongoing. Treat it as a licence to run a regulated business, not a one-time form.

Decide exactly what service you will offer first, since each category has its own regulations and eligibility. Entity type, net worth and qualifications of key people differ by category, so check the current rules before applying.

Common mistakes

• Giving paid tips on social media without registration.
• Calling an advisory service a “community” to avoid rules.
• Picking the wrong category for the service actually offered.
• Assuming registration under another regulator, such as the RBI, covers securities activity.

Related guides: RBI approvals for NBFC and fintech, MCA and ROC, DPIIT recognition

FAQs

Does giving stock tips need SEBI registration?

Paid advice generally falls under investment adviser rules, and research reports under research analyst rules. Both need registration.

What does SEBI regulate?

The securities market and the intermediaries operating in it, including brokers, portfolio managers and mutual funds.

Is one registration enough for every activity?

No. Each activity has its own regulations, so you register for the specific category.

Planning a market-facing business? Talk to a Taxhint expert to choose the right category.