The last section of the perimeter is the newest, and it works on the other side of the relationship: rather than only pursuing unregistered advisers, SEBI has cut off the commercial oxygen by restricting what its own regulated entities may do with them.
The trigger is drawn wide. A person falls inside the restricted class by giving advice or a recommendation in respect of a security without being registered, or by making a claim about return or performance in respect of a security without SEBI's permission. Either limb is enough. The performance-claim limb is the one that catches people who thought they were safe: somebody who never says buy, and posts a screenshot of a profit and loss statement, has made a return claim.
What does the association rule ban?
The restriction is on association. SEBI's 2024 amendments to the intermediaries framework, with the implementing circular in October 2024 and clarifications through January 2025, prohibit regulated entities and their agents from associating with a person in the restricted class. Association is read broadly. It covers money changing hands, referral of clients, and the linking of information-technology systems, which between them reach nearly every way a broker can benefit commercially from a promoter's audience. Firms were given months rather than years to unwind existing arrangements. Verify the amendment regulations, the circular dates and the current text of the exceptions at sebi.gov.in, checked 7 September 2026; this area moved twice between August 2024 and early 2025.
Two carve-outs matter. Genuine investor education remains permitted, provided it carries no recommendation and no return or performance claim, which is a narrower space than the people using it believe. And associations through specified digital platforms that operate a mechanism for removing non-compliant content are treated differently from direct commercial arrangements.
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Enforcement and what it means in practice
Enforcement follows a recognisable shape, and knowing the shape is more useful than knowing any particular case. An unregistered person taking money for securities advice faces directions under the SEBI Act to disgorge the fees collected, a debarment from the securities market for a stated period, and a monetary penalty. Section 15EB provides for a penalty on an investment adviser or research analyst starting at one lakh rupees, accruing daily to a ceiling of one crore. Verify at sebi.gov.in, checked 7 September 2026.
Notice that disgorgement runs on gross receipts rather than on profits. Somebody who collected ₹10,77,840 in subscriptions and spent most of it on advertising is still asked for the gross.
The learner will meet this rule from the other side. A broker or an asset manager offering to pay for a mention, or a referral link, or an integrated signal feed, is asking the recipient to be the unregistered half of a prohibited association. The answer is registration or refusal, and the reason to have settled it in advance is that the offer arrives with a number attached.