The Securities and Exchange Board of India (Sebi) chairman rejected allegations of “regulatory vacuum” by Avadhut Sathe Trading Academy (ASTA) after the firm was barred from the securities market on Thursday.
“There is no regulatory vacuum, there is a lack of understanding because the regulations are clear that you cannot give stock tip advice,” said Sebi chair Tuhin Kanta Pandey at a National Stock Exchange (NSE) event.
Pandey’s remarks came a few days after the regulator issued its strongest clampdown yet on a finfluencer. Late on Thursday, Sebi barred Avadhut Sathe and his firm ASTA from dealing in securities for allegedly acting as unregistered investment advisers and making illegal gains of ₹546 crore.
The interim ex-parte order targeted one of India’s most visible stock market training ecosystems, which Sebi said had blurred the line between education and actionable investment advice.
ASTA, in a statement after the order, said it was “a victim of regulatory vacuum”, insisting that it does not issue stock tips, recommendations or research, and that all market illustrations used in its sessions were for “conceptual clarity.” It said it would challenge the order and had full faith in the judicial process.
“We are a victim of a regulatory vacuum and do not fall under the category of research analyst or investment adviser,” said an ASTA spokesperson on Friday.
Sebi, however, found that the academy operated less like a training institute and more like an advisory entity. A search operation at ASTA’s premises and at the homes of Sathe and his wife in August led to the discovery of live trading rooms where participants received precise intraday cues, buy and sell levels, stop losses, resistance points and strategy guidance. Recordings reviewed by Sebi showed students acting immediately on Sathe’s prompts.
The regulator also analyzed the actual trading outcomes of mentorship participants for six months post-completion of the program, which cost ₹6.75 lakh.
Of the 311 trainees, PAN details of 186 could be matched, and these individuals collectively lost ₹1.93 crore. ASTA itself reported a loss of ₹1.89 crore, while Sathe booked personal trading losses of ₹4.31 crore across FY24-25 and FY25-26.
Pandey also cautioned against the misuse of real-time data under the guise of education.
“Live data should not be used at all for educational purposes,” he said. “You must have seen something, recently we saw in some orders of Sebi, that we will have to face the truth, and the truth is that people are very hesitant to speak the truth.”
The Sebi chief said there is a deeper structural problem, wherein regulated intermediaries, including registered investment advisers and research analysts, are barred from showcasing their past performance, while unregistered players freely make unverifiable claims.
“Investors want to know what their past record is, and we can’t let them know their past record because what is its verification? If I can do anything self-claimed, I can show my good advice, I can choose not to show my bad advice,” Pandey said.
The chairman spoke at the pilot launch of the past risk and return verification agency (PaRRVA), a first-of-its-kind initiative by Sebi.
Risk returns
PaRRVA validates risk-return metrics for investment advisers, research analysts, and trading members, ensuring more credibility, compliance and investor trust.
It connects a Sebi-registered credit rating agency acting as PaRRVA with a recognized stock exchange serving as the PaRRVA Data Centre.
Together, they will independently authenticate intermediaries’ historical returns using a standardized and transparent methodology. Intermediaries will not be permitted to highlight verified returns for specific products or strategies.
An oversight committee will supervise both PaRRVA and the PDC, ensuring compliance with verification protocols and safeguarding data privacy. In its initial rollout, the mechanism covers registered investment advisers, research analysts and brokers offering algorithmic trading services.
Pandey said the system positions India ahead of global markets in tackling unverifiable performance claims.
“With the launch of PaRRVA, India will be setting a new international benchmark for transparency, accountability and investor protection,” he said.
He added that well-regulated entities often struggle to attract clients precisely because they cannot disclose legitimate track records, while unregulated players thrive on bold marketing. By closing this gap, Sebi aims to shift investor flows back toward regulated intermediaries.
