sebi:MO/30/MIRSD/12/03

SEBI · SEBI · 2003-07-10 · A. K. Batra, 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

Certificate of registration of M/s NAM Securities Ltd. suspended for 15 days

Provisions invoked

• s. 19

Regulations

• Reg. 7
• Reg. 13(2)
• Reg. 13
• Reg. 17(1)

Parties

• M/s NAM Securities Ltd.

Holding

The Whole Time Member suspended the certificate of registration of M/s NAM Securities Ltd., a DSE member, for a period of 15 days as a token penalty for violations of contract note issuance, acknowledgement, and dealing with an unregistered sub broker. The order found most violations to be small and technical except the dealing with an unregistered sub broker.

Full text

2 (c) Rules, Regulations and Byelaws of DSE. (d) Rule 15(1)(g) of Securities Contract (Regulation) Rules, 1957 read with Regulation 17(1) (g) of SEBI (Stock Brokers and Sub Brokers) Rules 1992. (e) Rule 4(b) of SEBI (Stock Brokers and Sub Brokers) Rules, 1992. 3.1 The Enquiry Officer submitted her report on 30.06.2003. In her report, taking into account the irregularities that have been established against the member, the Enquiry Officer recommended suspension of certificate of registration of the member for a period of three months. The Enquiry Officer found that the member committed the following violations: 3.1.1 The contract notes did not bear pre-printed serial numbers on them but were generated on settlement basis through computer software. 3.1.2 The contract notes were not issued within stipulated time. 3.1.3 Non issuance of contract notes by the member in some transactions. 3.1.4 Duplicates of the Contract Notes were not acknowledged by the clients. 3.1.5 Terms and conditions as well as SEBI Registration Number were not mentioned on the contract notes issued. 3.1.6 Dealing with unregistered sub brokers.

3 3.1.7 Delay and short payment of SEBI fee. 3.1.8 Non- maintenance of client data base. 4.1 In terms of regulation 13(2) of SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 (hereinafter referred to as ‘the said regulations’) a show cause notice dated 10.07.2003 was issued to the member to show cause as to why the

4 taken out between two settlements. Whereas during inspection of two years’ accounts, there was not a single case of insertion / deletion of the contract note. Insertion / deletion of the contract note pre- requires insertions / deletion of a trade which never happened. Just on mere assumption of possibility of insertion / deletion of the contract note, which had never taken place, recommending a penalty of suspension is unlawful and unjustified. 4.2.3 With regard to the allegation of non issuance of contract notes within a stipulated time, the member submitted that reprint of contract notes at the time of inspection in trades for DSE were for the following clients: Mr. B K Chawla, Fortune, Ashwni Goyal & Sons, Vineet Khanna, Ashok Arora, S K Khemka. All of them requested for reissue of contract notes because of dim prints on the contracts notes originally given, vide their written communication (copy of the said letter were given to the inspecting team alongwith the letter dated 13.03.01 and to the EO vide letter dated 17.04.03). Inspecting team was made to satisfy for the reissue of contract notes since 4 of the clients were present in the office during the day of inspection. Mr. Ashwani Goyal being one of the person named in the list to whom the contract notes was reissued is a director in the company who was personally present all the times and giving answer to the query of the inspecting team. Mr. Vinnet Khanna, B K Chawla and Ashok Arora were the regular jobbers / arbi

Source: SecMarx — sebi:MO/30/MIRSD/12/03. 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.