sebi:MO/187/MIRSD/02/2006

SEBI · SEBI · 2005-07-04 · Madhukar, Whole Time Member

Reviewed by Varun Matlani, Advocate — Securities Lawyer practicing in SAT and SEBI

Facts / Headnote

Censure imposed on the broker

Provisions invoked

• s. 19
• s. 12

Regulations relied on

• SEBI (Enquiry & Penalty) Regulations, 2002

Parties

• ISE Securities and Services Ltd.

Holding

The Whole Time Member censured M/s. ISE Securities and Services Ltd., Member of NSE, for lapses and irregularities observed during inspection of its books of accounts for the period February 2000 to April 2002.

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 ISE SECURITIES AND SERVICES LTD., MEMBER, NATIONAL STOCK EXCHANGE HAVING SEBI REGISTRATION NO.INB231077737. 1.0             BACKGROUND

1.0 BACKGROUND 1.1 M/s. ISE Securities and Services 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.INB231077737. 1.2 Inspection of the books of accounts, documents and other records of the broker was carried out by SEBI for the period February 2000 to April 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 May 19, 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 09.06.05 recommending for imposition of a minor penalty of censure on the broker. 2.2 A copy of the Enquiry Report was sent to the broker on 14.06.05, 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. 2.3 The broker replied vide letter dated 04.07.05 and submitted that the few instances of non-compliance were merely technical and operational in nature and there was never any intentional or deliberate non-comp

systematization of its workflow and the fact that the broker had no intent to violate any of the directives, orders and guidelines of SEBI at any time. 3.0 CONSIDERATION OF ISSUES 3.1 I have carefully considered the findings of inspection, enquiry and the submissions made by the broker and note significant points as under: a) Permitting sub-brokers to trade before obtaining SEBI Registration It has been alleged that Shri Surendra Holani was allowed to trade before receiving SEBI registration certificate. The broker replied that sub-brokers of ISS were activated in the system only after they were registered with SEBI. The

Source: SecMarx — sebi:MO/187/MIRSD/02/2006. 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.