sebi:EAD-5/BS/AO/118/2017-18
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Facts / Headnote
Allegations not established; adjudication proceedings disposed of without penalty
Provisions invoked
- s. 15
- s. 15H
- s. 15I
Regulations
- Reg. 7
Parties
- Star Finvest Pvt Ltd
Holding
The allegations against Star Finvest Pvt Ltd for violation of Clause A(2) of the Code of Conduct for Stock Brokers read with Regulation 7 of the Broker Regulations are not established, and the adjudication proceedings initiated vide SCN no. EAD-5/ADJ/SVKM/AA/OW/17746/2015 dated June 29, 2015 stand disposed of without penalty.
Full text
Adjudication Order against Star Finvest Pvt Ltd in the matter of Era Infra Engineering Ltd. Page 2 of 10 counterparty broker for the self trades executed by Singh Consultancy Pvt Ltd in the scrip of EIEL, has failed to exercise due skill, care, and diligence, and thereby alleged to have violated Clause A(2) of the Code of conduct for Stock Brokers as stipulated in schedule II read with Regulation 7 of the Stock Brokers Regulations.
Adjudication Order against Star Finvest Pvt Ltd in the matter of Era Infra Engineering Ltd. Page 3 of 10 i. They are a recognized broker of the National Capital Region (NCR) and has large clientele consisting of corporates, HNIs, financial institutions etc. ii. Singh Consultancy Pvt Ltd (“client / SCPL”), was registered with them on 10.03.2017 in compliance with applicable laws and after carrying out proper KYC. iii. Trading of SCPL in EIEL was done in the ordinary course. iv. SCPL in all its trades has timely honored its obligations i.e. pay/receive consideration, give/take delivery, adherence to exposure limits, etc. v. SCPL was a regular trader in the securities market and its total trading during the period under consideration was approx. Rs. 295 cr (NSE Cash Market), Rs. 12,149 cr (NSE F&O), Rs. 66 cr (BSE Cash Market). vi. EIEL was highly liquid scrip during the investigation period. SCPL was both buying and selling shares. vii. SCPL executed 174 self-trades in BSE and 174 self trades in NSE, wherein they were broker. SCPL had placed both buy and sell orders in EIEL, and that in some of the orders, a very miniscule part got executed with its own counter
Adjudication Order against Star Finvest Pvt Ltd in the matter of Era Infra Engineering Ltd. Page 4 of 10 circumstances in carrying out activities and functions. In support of its contention, Noticee has quoted the observations from the order of Hon’ble Securities Apellate Tribunal (SAT), dated 25.11.2011 in the matter of SMC Global Securities Pvt Ltd vs SEBI. xiv. There was nothing untoward in the trades to generate alert on the risk monitoring system, also there was no alert from any other medium. xv. No “transaction Alerts” were received from BSE or NSE. xvi. NSE and BSE have implemented functionality to prevent the occurrence of self trades in the live market on 03.08.2015 and 16.03.2015 respectively.
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Source: SecMarx — sebi:EAD-5/BS/AO/118/2017-18. 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.