Market regulator has banned portfolio management service (PMS) Scient Capital Pvt, which has Rs 66.8 crore AUM, from onboarding new clients till they meet minimum networth requirement. In an interim cum showcause notice issued on Monday, February 17, the Securities and Exchange Board of India (SEBI) noted that the PMS submitted incorrect and misleading reports on compliance. Through the order, the regulator also banned them accepting additional funds or securities from its existing clients till the requirement is met.Considering the interest of the clients, immediate preventive action by issuance of interim directions is required to be taken against the PMs, the order noted. It is noteworthy that despite lapse of more than two years since the end of timeline for meeting the regulatory requirement of net worth (i.e., January 15, 2023), the Noticee has shown no progress towards compliance. This persistent failure indicates an unacceptable state of affairs, SEBI’s Whole-time Member Amarjeet Singh wrote.
