SEBI Slaps ₹6 Lakh Penalty on Research Analyst Rishabh Tanwar for Outsourcing Core Activities, Losing KYC Records

SEBI has imposed a ₹6 lakh penalty on registered research analyst Rishabh Tanwar for regulatory lapses involving outsourcing, client records and compliance controls.

According to the reported findings, he outsourced core activities, including KYC and client grievance handling, without adequate safeguards. The arrangement also lacked a properly executed agreement when it began, a comprehensive outsourcing policy and documented due diligence.

A concern was missing client information. Tanwar could not produce KYC records for 471 of his 509 clients, explaining that the data had been deleted.

SEBI found that suitable backup and disaster recovery arrangements were not maintained to preserve and retrieve these records.

The report states that no quantifiable investor loss was identified. Nevertheless, SEBI treated the failures as regulatory violations requiring a penalty.

Tanwar reportedly admitted the lapses, cited inexperience and excessive reliance on the service provider, and said he had discontinued the arrangement. moneylife.in

The compliance message is that outsourcing work does not transfer the registered intermediary’s responsibility.

For research analysts and other regulated professionals, the practical lesson is to clearly identify which functions may be outsourced and which must remain under their control.

Before appointing a vendor, document capability checks, responsibilities, confidentiality safeguards and monitoring arrangements.

Client records should be securely backed up, and recovery should be tested rather than assumed. Written policies are useful only when followed in daily operations.

The proceedings concerned Tanwar’s regulatory failures; they did not determine the alleged illegal activities of the service provider. 

Delegating tasks requires supervision, evidence and continued professional accountability.