sebi:MO/58/MIRSD/12/2005
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Warning issued to the broker
Provisions invoked
- s. 19
Regulations
- Reg. 4
- Reg. 13(2)
- Reg. 13(4)
Parties
- Tower Capital & Securities Pvt. Ltd.
Holding
The broker, Tower Capital & Securities Pvt. Ltd., was found to have violated SEBI circulars SMD/Policy/IECG/1-97, SMD/Policy/Cir/5-97 and Regulation 4.3.1 of NSE (WDM) Trading Regulations by failing to obtain client registration from CSFB India Securities Pvt. Ltd., and was warned to be cautious in future.
Full text
Page 2 of 5 27.05.04 and recommended that the broker be warned in respect of the violations observed inter-alia not maintaining the client details in respect of CSFB India Securities Pvt. Ltd. and thereby violating the provisions of SEBI circular no. SMD/Policy/IECG/1-97 dated 11.02.97, SMD/Policy/Cir/5-97 dated 11.04.97 and Regulation 4.3.1 of NSE (WDM) Trading Regulations.
Page 3 of 5 1) Failure to obtain acknowledgement of clients in some of the contract notes and failed to mention PAN nos. in a few contract notes of value exceeding Rs. 10 lakhs.
Page 4 of 5 has violated the provisions of SEBI circular no. SMD/Policy/IECG/1-97 dated February 11, 1997, SMD/Policy/Cir/5-97 dated April 11, 1997 and Regulation 4.3.1 of NSE (WDM) Trading Regulations. The broker had submitted that they were under the impression that the said entity is a registered FII and as such the said circulars, requiring to obtain client registration were not applicable, which is not tenable as there is no such exemption for registered intermediaries as interpreted by the broker. It was also submitted by them that they made lot of efforts to get the client agreement with CSFB and in this regard a letter dated March 5, 2003 was written by them to CSFB for client registration form / agreement / empanelment. I note that the Enquiry Officer made a finding to the effect that no correspondence was filed before him by which it could be proved that broker made efforts since the only letter which is filed was written only on March 5, 2003 and the broker itself was saying that they stopped trading with CSFB w.e.f. November 28, 2002.
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Source: SecMarx — sebi:MO/58/MIRSD/12/2005. 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.