Groww Asset Management Settles With SEBI on Violations Of Regulatory Norms

Groww Asset Management Settles With SEBI on Violations Of Regulatory Norms

Pays the markets regulator Rs.9 lakh

Groww Asset Management Ltd (formerly known as Indiabulls Asset Management Co Ltd), and Groww Trustee Ltd, have settled with the Securities and Exchange Board of India (SEBI) on alleged violations of regulatory norms.

The settlement for Rs.9 lakh stems from a suo motu application filed by Groww Asset and Groww Trustee. The two neither admitted nor denied the findings of the SEBI regarding violations from April 2020 to March 2022. It was alleged that certain scheme-related expenses were not paid as mandated under the 22 October 2018 SEBI Circular SEBI/HO/IMD/DF2/CIR/P/2018/37.

(The Circular addresses the norms and obligations concerning scheme-related expenses, including commissions to distributors).

But herein, the expenses were borne by the AMC, contravening SEBI's missive that charges, including distributor commissions, must be funded solely through the scheme within the regulatory limits.

The transition from Indiabulls to Groww entities occurred in May 2023 due to the acquisition by Nextbillion Technology Pvt Ltd.

On submission of the settlement application, Groww discussed the terms with SEBI.

The SEBI order read, “Under Section 15JB read with Section 19 of the Securities and Exchange Board of India Act, 1992 and Regulation 23 of the Settlement Proceedings Regulations, 2018, it is ordered that any proceedings that may be initiated for the violations as mentioned in paragraph 1 are settled in respect of the applicants.”

SEBI's Settlement Proceedings Regulations allow for resolution without an admission of guilt.

Thus, by remitting the amount to SEBI, the settlement protects Groww Asset and Groww Trustee from further enforcement actions.