Charge of commission on profit by tip advisers to customer

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This query is : Resolved

CPoojaA (Querist)

02 July 2013 Hello,

IF I give tips on share buy/sell. So I charge commission on profits earned by my clients. I wanted to know is there any restriction/regulation by SEBI or any other authority on charge of such commission.

thank u.

Ajay Mishra

Ajay Mishra (Expert)

03 July 2013 It is a not allowed under trading and SEBI has not allowed to charge such kind of money from investors. It is treated as professional misconduct.

CPoojaA

CPoojaA (Querist)

12 July 2013 Sir, can you provide with some reference of the professional misconduct. under which section or note of sebi act i can find the same.

thank u

CPoojaA

CPoojaA (Querist)

12 July 2013 Sir, can you provide with some reference of the professional misconduct. under which section or note of sebi act i can find the same.

thank u

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

19 July 2024 Professional misconduct related to securities markets and its regulation, including under SEBI (Securities and Exchange Board of India) Act, typically falls under specific provisions that govern the conduct of market participants, intermediaries, and professionals involved in the securities market. Here are some references where you can find provisions related to professional misconduct under the SEBI Act:

### SEBI Act, 1992

1. **Section 15HB - Code of Conduct:**
- This section mandates SEBI to specify a code of conduct for intermediaries or other persons associated with the securities market.

2. **Section 15HA - Prohibition of Insider Trading:**
- Provisions related to insider trading, where unauthorized disclosure of unpublished price-sensitive information is considered a serious professional misconduct.

3. **Section 23 - Penalty for Failure to Furnish Information, Return, etc.:**
- Penalties for failure to furnish information or returns, which can constitute misconduct under regulatory obligations.

4. **Section 24 - Penalty for Contravention Where No Separate Penalty has been Provided:**
- General provision for penalties in case of contraventions not covered under specific provisions.

5. **Section 26 - Power to Adjudicate:**
- SEBI's adjudication powers to inquire into and impose penalties for violations, including professional misconduct.

6. **SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003:**
- These regulations define various fraudulent and unfair trade practices which can constitute professional misconduct.

### SEBI (Prohibition of Insider Trading) Regulations, 2015

- These regulations provide detailed provisions related to insider trading and specify the responsibilities and liabilities of persons involved, including professionals such as directors, officers, and employees of listed companies and intermediaries.

### SEBI (Investment Advisers) Regulations, 2013

- These regulations govern the conduct of investment advisers and specify their duties, responsibilities, and prohibited activities, which can constitute professional misconduct if violated.

### SEBI (Intermediaries) Regulations, 2008

- These regulations specify the obligations, responsibilities, and conduct standards for intermediaries in the securities market, including brokers, merchant bankers, etc.

### SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992

- These regulations outline the conduct standards and obligations of stockbrokers and sub-brokers, covering aspects that could lead to professional misconduct if breached.

### Where to Find Specific Provisions

- **SEBI Act and Regulations:** You can find detailed provisions related to professional misconduct under the SEBI Act, 1992, and various SEBI regulations on the SEBI website (www.sebi.gov.in) or in legal databases such as Westlaw or SCC Online.

- **Legal Advice:** For specific cases or detailed understanding, it's advisable to consult legal professionals specializing in securities law or compliance officers within financial institutions regulated by SEBI.

Understanding and adhering to these provisions is crucial for maintaining ethical standards and regulatory compliance in the securities market, ensuring fair and transparent conduct by all market participants.

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