sebi:NR/AO/1/2015
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Facts / Headnote
Mixed findings: some violations upheld (Regulation 15A, fund segregation, terminal allotment to remisiers/clients, operation by non-employees, exclusive e-mail ID, interest on credit balances, unsigned DIS, failure to clear balances before account closure), some allegations not sustained (in-person verification by group company staff, branch connectivity, delay in dispatching demat requests, blocking lost DIS)
Provisions invoked
- s. 15
- s. 15H
- s. 15J
- s. 23H
- s. 19G
- s. 23J
- s. 19I
Regulations
- Reg. 7
- Reg. 6
- Reg. 9
- Reg. 20A
- Reg. 199
- Reg. 15A
- Reg. 20(2)
- Reg. 54(4)
Parties
- Gee Kay Stock & Shares Ltd (GKSSL)
Holding
The noticee was found to have violated Regulation 15A of the Broker Regulations (director acting as sub-broker), Clause A(2) of the Code of Conduct (non-segregation of client and own funds), Clause A(2) and A(5) (allotment of terminals to remisiers/clients and operation by non-employees, no exclusive e-mail ID), Rule 8(1)(f)/8(3)(f) of SCRR 1957 (paying interest on credit balances), and Clause 4 of the Code of Conduct for Participants (executing instructions on unsigned DIS and failing to clear balances before account closure). Several other allegations were not sustained for lack of documentary evidence or benefit of doubt.
Full text
October 22, 2001 and BSE Notice no 20021217- 18 dated December 17, 2002 4. Allotment of terminals at its remisiers' offices Clause A(2) and A(5) of the Code of Conduct for stock brokers laid down under Schedule II read with Regulation 7 of Broker Regulations and SEBI circular no. SMDRP/POLICY/CIR-49/2001 dated October 22, 2001 and BSE Notice no. 20040205- 13 dated February 5, 2004.
6. Not refunding credit balances to clients at the time of closure of account Clause 4 of Code of Conduct for Participants specified under Regulation 20A of DP Regulations read with CDSL Bye Law 13.7 and CDSL operating instruction no. 10.5.2 issued under Bye Law 4.2
noticeeand the Noticee was advised to appear for the same on January 10, 2013 at SEBI, Northern Regional Office, New Delhi.Mr. Shailendra Kumar Singh, Principal Officer of the noticee and Mr. Rakesh Gupta, Authorised Representative for the Noticee (Noticee AR) attended the hearing on January 10, 2013 and made written submissions on behalf of the noticee that have been dealt with in later part of this order. The noticeealso made
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Source: SecMarx — sebi:NR/AO/1/2015. 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.