sebi:EAD-8/KS/AA/AO/234/2019-20
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Facts / Headnote
Violations established; monetary penalty imposed on the Noticee
Provisions invoked
- s. 15
- s. 15H
- s. 15J
- s. 15F
- s. 23J
- s. 15C
- s. 23
- s. 23H
- s. 23C
Regulations
- Reg. 6
- Reg. 9(f)
- Reg. 21(1)
- Reg. 26
- Reg. 9(e)
Parties
- Geojit Financial Services Limited
Holding
The Noticee, Geojit Financial Services Limited, was found to have violated SEBI circulars on AML/CFT obligations, Regulation 9(e) and 9(f) of the Broker Regulations, Regulation 21(1) and 21(4), the Code of Conduct under Schedule II, and other applicable circulars relating to settlement of client accounts and grievance redressal. A total penalty of Rs. 30,00,000 was imposed: Rs. 5,00,000 under Section 15C of the SEBI Act read with Section 23C of the SCR Act, and Rs. 25,00,000 under Section 15HB of the SEBI Act read with Section 23H of the SCR Act.
Full text
Page 2 of 50 Sections 23C and 23H of the Securities Contracts (Regulation) Act, 1956 (hereinafter referred to as ‘SCR Act’) for the alleged violation of the following provisions: a) SEBI circular No. ISD/CIR/RR/AML/1/06 dated January 18, 2006; b) SEBI master circular on AML/CFT obligations dated December 31, 2010; c) SEBI circular No. CIR/MIRSD/2/2013 dated January 24, 2013; d) Regulation 9(e) of the Broker Regulations; e) SEBI circular No. MIRSD/SE/Cir-19/2009 dated December 3, 2009; f) SEBI circular No. SEBI/MIRSD/SE/Cir/01/2011 dated May 13, 2011 with respect to quarterly/ monthly settlement of funds and securities of clients; g) Exchange circular Nos. NSE/INSP/13606 dated December 03, 2009 read with circulars No. NSE/INSP/14048 dated February 03, 2010 and NSE/INSP/21651 dated September 09, 2012; h) SEBI circular No. SMD/SED/CIR/93/23321 dated November 18, 1993; i) Clause A(2), A(5) & C(6) of the Code of Conduct specified under Schedule II read with Regulation 9(f) of the Broker Regulations; and j) Regulation 21(1) and 21(4) of the Broker Regulations.
Page 3 of 50 (hereinafter referred to as ‘SEBI Adjudication Rules’) and Rule 4(1) of Securities Contracts (Regulation) (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 2005 (hereinafter referred to as ‘SCRA Adjudication Rules’) communicating the alleged violations. The Noticee was also called upon to show cause as to why an inquiry should not be initiated against it in terms of Rule 4 of the Adjudication Rules and penalty be not imposed under the provisions of Regulation 26(ii), (iii), (xv), (xvi) and (xx) of the Broker Regulations, Sections 15C and 15HB of the SEBI Act and Sections 23C and 23H of the SCR Act for the aforesaid alleged violations.
Page 4 of 50 (c) The Noticee during the course of inspection submitted that it first appointed a principal officer vide letter dated August 30, 2006 and that the approval for this appointment was obtained from its Board on October 28, 2006. It was observed that the appointment of Principal Officer has been made after a delay of more than 7 months, which is not in accordance with the provisions of SEBI circular No. ISD/CIR/RR/AML/1/06 dated January 18, 2006, In view of the same, it was alleged that the Noticee has violated the provisions of SEBI circular No. ISD/CIR/RR/AML/1/06 dated January 18, 2006.
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Source: SecMarx — sebi:EAD-8/KS/AA/AO/234/2019-20. 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.