sebi:MO/107/MIRSD/01/06

SEBI · SEBI · 2003-12-11 · 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

Warning imposed

Provisions invoked

Regulations

Parties

Holding

The Whole Time Member warned M/s. Liquid Investments and Financial Services (India) Pvt. Ltd., member of NSE, and directed it to be more cautious in future and adhere to the SEBI Act, 1992 and Rules and Regulations thereunder.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ ORDER UNDER REGULATION 13(4) OF SEBI (PROCEDURE FOR HOLDING ENQUIRY BY ENQUIRY OFFICER AND IMPOSING PENALTY) REGULATIONS, 2002, AGAINST LIQUID INVESTMENTS AND FINANCIAL SERVICES (INDIA) PVT. LTD., MEMBER, NATIONAL STOCK EXCHANGE, SEBI REGISTRATION NO. INB230778737. 1.0             BACKGROUND

1.0 BACKGROUND 1.1 M/s. Liquid Investments and Financial Services (India) Pvt. Ltd. (hereinafter referred to as “the broker”) is a member of National Stock Exchange, (“NSE”) registered with SEBI as a stock broker under section 12 of SEBI Act, 1992 with SEBI Registration No. INB230778737. 1.2 Inspection of the books of accounts, documents and other records of the broker was carried out by SEBI for the period 1.4.2000 to 31.10.2002 and certain irregularities found to have been committed by the broker were observed. 2.0 ENQUIRY PROCEEDINGS 2.1 In view of the above, an Enquiry Officer (EO) was appointed vide SEBI Order dated December 11, 2003 under Regulation 5(1) of SEBI (Procedure for Holding Enquiry) Regulations, 2002 (hereinafter referred to as the “said Regulations”) to inquire into the irregularities observed during the inspection of books of accounts of the broker. The EO after conducting the enquiry in terms of the said regulations submitted his report on 28.10.04 recommending for imposition of a minor penalty of warning on the broker. 2.2 A copy of the Enquiry Report was sent to the broker on 04.11.04, in terms of Regulation 13(2) of the said Regulations, advising it to show cause as to why appropriate penalty including the penalty as recommended by the Enquiry Officer should not be imposed. However, the broker has not replied to the show cause notice. 3.0 CONSIDERATION OF ISSUES

3.1 I have carefully considered the findings of inspection and Enquiry and note that the broker has not replied to the show cause notice. The EO has found the broker guilty of various violations and my observations in this regard are as under : a) Irregularities in maintenance of Order Book It was alleged that the broker was not maintaining order book. Further, time of receiving of order was not reflected on the contract notes issued by it. The broker stated that majority of the orders were placed on phone and some orders were placed in person in the trading room. As the frequency of orders received on phone was fast, it was impractical to record the order in the order book and then punch the same in the online trading terminal. The broker admitted its lapses with regard to non-maintenance of order book, the EO thus found that it has violated SEBI Circular No.SMD/Policy/ IECG/1-97 dated February 11, 1997. b) Irregularities in issuance of contract notes It was alleged that the contract notes for the period 1.4.00 to 31.3.02 did not bear pre-printed serial numbers. The serial numbers were computer generated and started with a fresh series daily. It was further alleged that the broker did not obtain dated acknowledgements from clients on the duplicates in the absence of which it could not be confirmed whether the contract notes were being issued within 24 hours of trade execution. The broker submitted that since 1.4.02, the stationery used by it bore the requisite pre-printed se

You have read the preview. Create a free account to read the full order, track this party, and analyse it in Ontology.

Free accounts include 10 searches/day with full order access.

Analyse this matter in Ontology · Plans

Source: SecMarx — sebi:MO/107/MIRSD/01/06. 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.