Aria is an association of registered investment advisors that was founded after the introduction of the Sebi (Investment Advisers) Regulations by the regulator in 2013.
Mint explains what trading call providers do and why investors may need to look closer when seeking financial advice.
Who are trading call providers?
Trading call providers are entities or individuals who offer short-term buy-sell recommendations, intraday trading tips, or derivative calls to investors, often for a fee. They focus on speculative trades, rather than long-term financial planning.
Unlike fiduciary investment advisers, who create holistic financial plans aligned with clients’ goals, these entities are primarily driven by market timing and trading momentum. Many operate on social media or messaging platforms and often lure investors with promises of high or guaranteed returns.
Why has Sebi launched a crackdown?
Sebi’s action stems from a mounting trail of investor complaints, regulatory violations and instances of outright fraud. According to Aria’s study of 218 enforcement orders issued over the last decade, nearly two-thirds were against unregistered entities, all of whom were trading call providers. Even among the 71 orders passed against registered entities, over 90% targeted TCPs.
What changed in December 2024?
The December 2024 amendment to the Investment Adviser (IA) Regulations is a pivotal reform. Sebi formally ruled that entities primarily engaged in providing trading calls, intraday tips or derivative recommendations would no longer be eligible for registration as investment advisers.
This change stemmed from Sebi’s observation that the investment adviser framework, introduced in 2013, was designed for fiduciary advisers, who are professionals offering holistic, long-term financial planning.
Under the revised regulations for research analysts, a person or entity that is providing “research services” for consideration must register as a research analyst. Some TCPs registered as research analysts to come under the purview of the market regulator.
Until 2024, several TCPs obtained registration as investment advisers by declaring themselves as “advisers”, even though their core business was stock-tipping. Once registered, they often violated the IA norms by selling daily calls, using coercive marketing, and charging high, non-transparent fees. The December amendment now shuts that door completely. It allows investors to clearly distinguish between regulated, fiduciary advisers and speculative tip-sellers, and gives Sebi stronger legal ground to penalize violators.
What kind of violations has Sebi found?
The Aria study of enforcement orders for fiscal 2025 paints a worrisome picture. Of the 50 enforcement orders, 15 were against registered TCPs, where Sebi found serious lapses such as missing client agreements, coerced signatures on risk profiles, selling of higher-risk products, and fraudulent misrepresentation. Several entities collected goods and services tax without registration, failed to maintain required records, used misleading questionnaires and did not have thee required qualifications to act as a TCP.
The 31 orders against unregistered TCPs were focused on fraudulent misrepresentation, guaranteed return promises, and providing unregistered services as investment advisers.
“Unregistered people need to be caught. I’m sure the number of unregistered TCPs runs into lakhs,” said an investment adviser on the condition of anonymity. “They (Registered TCPs) provide a service investors want, but they were operating in the wrong regulatory category.”
What makes unregistered TCPs more problematic?
Registered TCPs, despite being ineligible as investment advisers after December 2024, function within Sebi’s visibility, now as research analysts. Their records, client lists and fee structures can be scrutinized, and Sebi can issue directions, impose fines, or cancel registrations. Most enforcement against them arises from inspections.
Unregistered TCPs, however, operate outside the regulatory perimeter. They typically advertise on social media or run anonymous websites promising “jackpot calls” or “100% accuracy” tips. Since they are not registered, they face no disclosure, record-keeping or suitability obligations, making investor redressal difficult. Aria found that nearly 87% of Sebi’s actions against unregistered TCPs in fiscal 2025 stemmed from investor complaints or media alerts, rather than direct regulatory detection.
How has this affected genuine investment advisers?
While the crackdown has improved transparency, it has also made compliance more complex for legitimate advisers. Many registered investment advisers say they now face higher operational costs, stricter documentation requirements and greater scrutiny, all of which can discourage small, independent advisers.
“Such illegal activities by trading call providers damage the entire investment advisory profession by eroding public trust,” said Abhishek Kumar, founder and chief investment officer at Sahaj Money, an investment advisory firm. “Due to such instances, the regulator is left with no choice but to crack the whip by increasing regulatory burden for all registered investment advisers.”
However, the study also reveals the low number of enforcement orders against registered investment advisers, which might help boost confidence among investors.
“Investment advisors are doing a great job. Only six complaints (since 2013) and none of them related to money. The complaints were only procedural,” said Renu Maheshwari, chairperson of Aria and a Sebi-registered investment advisor.
