sebi:10647

SEBI · SEBI · 2004-01-07 · Madhukar, Whole Time Member

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Censure imposed on the sub-broker

Provisions invoked

• s. 19

Regulations

• Reg. 13(4)
• Reg. 5
• Reg. 200

Parties

• M/s. V & U Securities Pvt. Ltd.

Holding

SEBI censured M/s. V & U Securities Pvt. Ltd., a sub-broker, for violating SEBI Circular No. SMD/Policy/Circular-11/97 dated May 21, 1997 and the code of conduct under Schedule II of the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992, by failing to properly maintain confirmation memos and client registration forms, entering into transactions before obtaining client registration forms, providing trading terminals to unregistered entities, and continuing to deal with a broker declared a defaulter.

Full text

Act, 1992 (hereinafter referred to as “SEBI Act”), Rules, Regulations and Circulars made there under. The inspection revealed various irregularities and violations to have been committed by the sub broker including those of irregularities in issuance of confirmation memos; deficiencies in the maintenance of clients’ agreements & registration forms, execution of transactions for the clients before obtaining client registration forms, dealing with unregistered sub brokers and dealing with a client who is a defaulter; and Whereas vide order dated January 07, 2004 an Enquiry Officer was thus appointed by SEBI under Regulation 5 of SEBI (Procedure for holding enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 (hereinafter referred to as “Enquiry Regulations”) to enquire into the alleged contravention of SEBI Act, Securities Contract (Regulation) Rules, 1957, SEBI (Stock Brokers & Sub- Brokers) Regulations, 1992 (hereinafter referred to as “Broker Regulations”), SEBI (Stock Brokers & Sub-Brokers) Rules, 1992 (hereinafter referred to as “Broker Rules”), SEBI Circulars, Bye-laws, Business Rules & Regulations of the Stock Exchange; and, whereas, the Enquiry Officer after conducting the enquiry in terms of the Enquiry Regulations and while finding that in the facts and circumstances of the case and the reply of the sub broker, albeit the charge of dealing with unregistered sub broker against it can not sustain, concluded that the sub broker by not properly maintaining c

Rules, 1957 and recommended a minor penalty of censure against sub broker vide his Enquiry Report dated October 28, 2004; and whereas, a copy of the said Enquiry Report was forwarded to the sub broker along with a show cause notice dated November 04, 2004 advising it to show cause as to why appropriate penalty including penalty as recommended by the Enquiry Officer should not be imposed on it ; and whereas, the sub broker did not reply to the said show cause notice inspite of its receipt and therefore I am proceeding in the matter on the basis of the material available on record; and whereas, from the reply given by the sub broker to the Enquiry Officer and also during the hearing before the Enquiry Officer, I note that the sub broker did not offer any satisfactory reply to the charges levied against it; and whereas, I also observe that the enquiry officer having considered the

DATE : 30/12/2005 PLACE: MUMBAI MADHUKAR WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA

Source: SecMarx — sebi:10647. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.