sebi:AK/AO-161/162/163/2013
Facts / Headnote
Penalty imposed on both Noticees for violating SEBI circulars on time stamping and CTR reporting
Provisions invoked
- s. 15
- s. 15J
- s. 15D
Parties
- M/s Principal Pnb Asset Management Company Private Limited
- M/s Principal Trustee Company Private Limited
Holding
The Noticees were held to have violated Clause 5 under Schedule II of SEBI Circular dated October 11, 2006 by providing blank time stamped redemption forms to a high net-worth investor, and also violated SEBI Circular dated July 05, 2007 by failing to report this non-compliance in the bimonthly Compliance Test Reports (CTR).
Full text
Page 2 of 16 II of SEBI Circular no. SEBI/IMD/Cir no.11/78450/06 dated October 11, 2006 and SEBI Circular no. SEBI/IMD/CIR No. 6/98057/07 dated July 05, 2007. Appointment of Adjudicating Officer
Page 3 of 16 exit the fund on the date the BSE index was high and re-enter on the date the BSE index was low. 6. The Noticees submitted its reply to the SCN vide letter dated February 25, 2013. The Noticees have inter alia stated in its reply that the investor had invested ` 20 crore in Principal Monthly Income Plan Scheme and that the investments were made between November 2007 and January 2008, thus crossing two quarters. The Noticees observed that the investor’s holding did not breach the 25% average holding for the quarters ended December 2007, March 2008 and June 2008, however, that for the quarter ended September 2008, the average quarterly holding of the investor exceeded 25% of the scheme’s average AUM balance for the said quarter. The Noticees have stated that an intimation letter was issued to the investor on October 06, 2008 inter alia explaining to them that their average holding for the quarter ended September 30, 2008 was 26.44% of the scheme Principal Monthly Income Plan (MIP), accordingly in the month of October 2008, either the Net Assets of the aforesaid scheme has to go up, or, the investor’s holding has to fall below 25% by way of redemption/ switch. The Noticees have further stated that there was no response from the investor to the letter issued on October 06, 2008. The scheme AUM did not rise sufficiently enough and even on expiry of the rebalancing period of one month, the investor continued to hold in excess of 25% of the Scheme’s AUM.
Page 4 of 16 redemption by the mutual fund at the closing NAV of November 14, 2008, the day of forced redemption to comply with the provisions of SEBI regulations.
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Source: SecMarx — sebi:AK/AO-161/162/163/2013. 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.