sebi:EAD/KS/AA/AO/116/2017-18
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Facts / Headnote
Allegations of violation of SEBI circulars and Code of Conduct established against the Noticee; penalty proceedings under Section 15HB of the SEBI Act to be determined
Provisions invoked
- s. 15
- s. 15H
- s. 15J
- s. 15F
Regulations
- Reg. 6
- Reg. 9(f)
- Reg. 26
Parties
- Noticee (stock broker, name not stated in extract)
Holding
The Adjudicating Officer held that the Noticee violated SEBI and Exchange circulars relating to running account settlement, RAS authorizations, account statements, and dividend handling, and violated Clause A(2) and A(5) of the Code of Conduct read with Regulation 9(f) of the Broker Regulations, attracting monetary penalty under Section 15HB of the SEBI Act.
Full text
Page 2 of 27 (d) Exchange circulars/ clarifications bearing nos. NSE/INSP/13606 dated December 03, 2009, NSE/INSP/14048 dated February 03, 2010 and NSE/INSP/21651 dated September 09, 2012; (e) SEBI circulars with respect to AML/ CFT bearing nos. CIR/MIRSD/1/2014 dated March 12, 2014 and ISD/AML/Cir-3/2010 dated December 31, 2010; and (f) Clause A (2) & A (5) of the Code of Conduct specified under Schedule II, read with Regulation 9(f) of the SEBI (Stock Brokers & Sub-Brokers) Regulations, 1992 (hereinafter referred to as ‘Broker Regulations’); thereby, liable for monetary penalty under Regulation 26 (iii), (xii), (xiii), (xv) & (xvi) of the Brokers Regulations.
Page 3 of 27 a) It was observed that in the following three instances dividend on client shares was being deposited in to the Noticee’s bank account, i.e., funds belonging to the clients have been credited into Noticee’s own bank accounts: Date Transaction Credit amount HDFC Account 00731 June 13, 2015 RELIANCE INDUS L EQU DIV14 1 80 July 22, 2015 HDFC Bank Dividend 2014-2015 680 HDFC Account 27961 June 04, 2015 CASTROL INDIA LTD FINAL DIV1 148 In view of the same, it was alleged that the Noticee had violated the provisions of SEBI Circular No. SMD/SED/CIR/93/23321 dated November 18, 1993. b) It was observed that client accounts were eligible for settlement in twenty instances, but the Noticee did not settle the said accounts. Out of the said twenty instances, it was observed that:
Page 4 of 27 In view of the same, it was alleged that the Noticee had violated the provisions of SEBI Circular No. MIRSD/SE/Cir-19/2009 dated December 03, 2009 and Exchange circulars/ clarifications bearing nos. NSE/INSP/13606 dated December 03, 2009, NSE/INSP/14048 dated February 03, 2010 and NSE/INSP/21651 dated September 09, 2012.
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Source: SecMarx — sebi:EAD/KS/AA/AO/116/2017-18. 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.