SEBI Rules Education Courses Providing Buy-Sell Calls Constitute Unregistered Investment Advisory Activity

Kaustav Chowdhury
2 days ago
4 min read

India's stock market education industry has expanded rapidly, with numerous platforms selling paid courses on technical analysis, options trading, and market strategies. Many operators have assumed that labelling content as "educational" places them outside SEBI's regulatory perimeter. Enforcement orders issued in late 2024 and 2025 have decisively challenged that assumption. SEBI has established that if a course delivers buy or sell recommendations, price targets, or trading signals, the activity constitutes investment advice under the SEBI (Investment Advisers) Regulations, 2013, and the provider must hold a valid certificate of registration.

Two cases illustrate how SEBI draws the line: the final order against Mohammad Nasiruddin Ansari and the entities behind Baap of Chart (BoC) in December 2024, and the ex parte interim order against Avadhut Sathe Trading Academy Private Limited (ASTAPL) in December 2025.

The Statutory Framework: What Counts as Investment Advice

Regulation 2(l) of the IA Regulations defines "investment advice" as advice relating to investing in, purchasing, selling, or otherwise dealing in securities or investment products, whether written, oral, or through any other medium. The definition is broad and medium-neutral, capturing recommendations delivered through YouTube, Telegram, WhatsApp, or any digital platform.

Regulation 2(m) defines an "investment adviser" as any person who, for consideration, is engaged in providing investment advice. Regulation 3(1) makes it mandatory for every person falling within this definition to obtain a certificate of registration from SEBI before commencing advisory activities. Operating without registration violates the SEBI regulatory framework. SEBI has also relied on Regulation 4 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003 (PFUTP Regulations), which as amended in January 2022, covers dissemination of misleading information through any media designed to influence investors' decisions.

The Baap of Chart Order: Disclaimers Are Not a Defence

In its December 2024 final order, SEBI examined activities carried out under the brand "Baap of Chart" by Ansari and associated entities. BoC operated social media channels with over 443,000 YouTube subscribers, selling paid trading courses. Its website carried a prominent disclaimer stating it was not registered with SEBI and that all information was for educational purposes only.

SEBI found that despite this disclaimer, the courses included specific buy and sell calls, stock recommendations, entry and exit levels, and stop-loss targets. Ansari was found to have assured returns to lure students into premium packages. SEBI concluded these activities constituted unregistered investment advisory in violation of Regulation 3(1), and directed disgorgement of approximately Rs 17.2 crore. Recovery proceedings for over Rs 18 crore were initiated in December 2025 after the entities failed to comply, with their movable and immovable property attached.

The ASTAPL Order: Scale of Unregistered Operations

The ASTAPL case involved a larger operation. In its December 4, 2025 interim order, SEBI found that ASTAPL, its founder Avadhut Dinkar Sathe, and director Gouri Sathe had collected over Rs 601 crore from approximately 3.37 lakh clients under the guise of stock market education. During live sessions, Sathe provided stock-specific recommendations, trade entry and exit points, stop-loss instructions, and price targets, functioning as an unregistered investment adviser.

SEBI also found that ASTAPL selectively showcased profitable trades while concealing losses, violating the PFUTP Regulations. SEBI ordered disgorgement of Rs 546.16 crore and barred the noticees from the securities market. ASTAPL approached the Securities Appellate Tribunal, which directed a deposit of Rs 100 crore. The Supreme Court subsequently allowed ASTAPL to withdraw Rs 2.25 crore per month for operational expenses while proceedings continued.

AI, Finfluencers, and the Proposed Advertisement Code

These cases are part of wider regulatory tightening. SEBI launched Project Sudarshan in November 2025, an AI-powered platform that identified over 20,000 instances of fraudulent financial content on social media. In June 2026, SEBI proposed a Common Advertisement Code (CAC) that would classify influencers with over five lakh followers as "celebrities," prohibiting them from endorsing specific investment products. SEBI has also made clear that using AI or algorithms to generate trading recommendations does not reduce an entity's regulatory accountability.

Penalties for Unregistered Advisory Activity

Section 15EB of the SEBI Act, 1992 provides that non-compliance with IA regulations attracts a penalty of not less than one lakh rupees, extending to one lakh rupees per day, subject to a maximum of one crore rupees. Where fraudulent practices are involved, Section 12A read with Section 15HA can attract penalties of up to twenty-five crore rupees or three times the profits made, whichever is higher. SEBI can also issue disgorgement orders, bar market access, freeze assets, and refer matters for criminal prosecution.

Education vs. Advisory: Where the Line Falls

SEBI's orders do not prohibit stock market education or require registration for it. The critical distinction is between general concepts and security-specific recommendations. A course explaining candlestick patterns or demonstrating moving averages using historical data generally falls on the education side. A course instructing subscribers to buy Stock X at Rs 450 with a target of Rs 520 constitutes investment advice regardless of labelling.

The key tests are: (a) whether content includes buy, sell, or hold recommendations for identified securities; (b) whether it includes price targets, stop-loss levels, or entry and exit timing; (c) whether the provider showcases profits or assures returns; and (d) whether consideration is charged. Entities whose activities meet these criteria should consider obtaining registration as an Investment Adviser under the IA Regulations or as a Research Analyst under the SEBI (Research Analysts) Regulations, 2014.

Key Takeaways

SEBI defines investment advice broadly under Regulation 2(l) of the IA Regulations 2013 to cover any buy, sell, or hold recommendation on securities, regardless of medium or label.

Disclaimers stating content is for educational purposes only do not exempt providers from the registration requirement under Regulation 3(1).

In the BoC and ASTAPL cases, SEBI ordered disgorgement of approximately Rs 17.2 crore and Rs 546.16 crore respectively.

SEBI's Project Sudarshan AI platform has identified over 20,000 instances of fraudulent financial content on social media.

The proposed Common Advertisement Code would classify finfluencers with over 5 lakh followers as celebrities, barring them from endorsing specific investment products.

EdTech platforms and finfluencers should audit their content and consider IA or RA registration if programmes include security-specific recommendations.