Indian Regulator Bans Advisors from Dealing with Unregulated Assets

Indian Regulator Bans Advisors from Dealing with Unregulated Assets

Indian securities market regulator, the Securities and Exchange Board of India (SEBI), issued a notice on Thursday warning the regulated investment advisors to refrain from dealing with unregulated assets.

Though the market watchdog only mentioned digital gold in the notice, many are anticipating it to be a warning against booming cryptocurrency investments in the country.

“It has come to the notice of SEBI that some registered Investment Advisers are engaged in unregulated activity by providing platforms for buying/ selling/ dealing in unregulated products including digital gold,” SEBI noted.

“Undertaking such unregulated activity including dealing (i.e., advisory, distribution and execution/ implementation services) in digital gold by Investment Advisers is not in accordance with the provisions of Section 12(1) of the SEBI Act, 1992 read with the SEBI (Investment Advisers) Regulations, 2013.”

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India is a major market for currencies. Many reports even put the country with the highest absolute number of crypto investors. However, digital currencies are not regulated in India, like any other major country.

Though the apex court of the country quashed a ban for banks to work with crypto companies, the government and other authorities in the country are still hostile against cryptocurrencies. A draft bill banning cryptocurrencies at a legislative level was expected to be tabled in the last few parliamentary sessions, but that bill was never introduced.

The latest warning by the Indian regulator came after the CEO of a popular home-grown crypto exchange said that the government and regulators are working together to introduce regulations for the crypto industry.

“Investment Advisers are, hereby, advised to refrain from undertaking such unregulated activities,” the agency added. “Any dealing in unregulated activities by Investment Advisers may entail action as deemed appropriate under the SEBI Act, 1992 and regulations framed thereunder.”