sebi:MO/11/MIRSD/05/06

SEBI · SEBI · 2002-05-17 · T.C. Nair, 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

Suspension of certificate of registration for a period of one month

Provisions invoked

• s. 19
• s. 12

Regulations

• Reg. 13(4)
• Reg. 5(1)
• Reg. 13(2)
• Reg. 6

Parties

• M/s. Dhananjay Securities

Holding

SEBI imposed a minor penalty of suspension of certificate of registration of M/s.Dhananjay Securities, Member - Calcutta Stock Exchange, with Registration Number INB031141139, for a period of one month.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ ORDER AGAINST M/s.DHANANJAY SECURITIES, MEMBER - CALCUTTA STOCK EXCHANGE, SEBI REGISTRATION NO. INB031141139 UNDER REGULATION 13(4) OF SEBI (PROCEDURE FOR HOLDING ENQUIRY BY ENQUIRY OFFICER AND IMPOSING PENALTY) REGULATIONS, 2002. 1.0 BACKGROUND 1.1 M/s. Dhananjay Securities (hereinafter referred to as the ‘broker’) is a member of Calcutta Stock Exchange, (hereinafter referred to as ‘CSE’) and is registered with the Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’) as a Stock broker under Section 12 of SEBI Act, 1992 with Registration Number INB031141139. 1.2 An Inspection of the Books of Accounts, Documents and other records maintained by the broker for the financial year 2001- 2002 was carried out by SEBI pursuant to the Order dated May 17, 2002 during July 17 – 18, 2002. During the inspection, certain irregularities found to have been committed by the broker were observed. 2.0 ENQUIRY PROCEEDINGS  2.1      The Inspection Report was forwarded to the broker on completion of inspection. The broker submitted its reply dated September 14, 2002. An Enquiry Officer (hereinafter referred to as "EO") was appointed vide Order dated November 13, 2003 under Regulation 5(1) of SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 (hereinafter referred to as the ‘said regulations’) to enquire into the alleged irregularities committed by the

The EO found that the broker had dealt with NSE member without obtaining proper registration as a sub-broker and hence found the broker guilty of violating SEBI circular No.SMD/POLICY/CIR/3-97 dated March 31, 1997 The broker submitted that it had done a few transactions on NSE for its clients without being registered as sub-broker. However, after the deficiency was pointed out, it had stopped dealing in NSE for its clients. Since the broker has admitted its lapse, I have no reason to differ with the findings of the EO. I find that such a conduct is in violation of Section 12 of the SEBI Act. e) Non- payment of turnover fee The broker submitted that it had not paid turnover fees as the matter was subjudice and the EO accepted the broker’s submissions. However, I find that the broker, vide its letter dated April 18, 2006 has submitted that it has paid Rs.7,50,000/- to SEBI vide its letter dated November 11, 2004 towards fee liability under SEBI Interest Liability Regularisation Scheme, 2004. I find that the broker has submitted a copy of the letter with the details of the payment made to SEBI. In case there is any shortfall in the payment, separate action may be initiated in terms of the Regulations. f) Off the floor transactions The EO found the broker guilty of violation of the provisions of SEBI Circular No.SMD/MDP/CIR/043/96 dated August 5, 1996 as he had not reported certain transactions to the stock exchange. The broker submitted that it had done a few off the floor trans

4.0 PERSONAL HEARING 4.1 An opportunity of personal hearing was granted to the broker on April 12, 2006 in Kolkata. Shri P K Bagla appeared before me for the personal hearing and made his

Source: SecMarx — sebi:MO/11/MIRSD/05/06. 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.