sebi:ORDER/BM/DS/2024-25/30275-30276

SEBI · SEBI · 2024-03-14 · Barnali Mukherjee, Adjudicating Officer

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Facts / Headnote

Penalty imposed on both Noticees under Section 15HB of the SEBI Act, 1992

Provisions invoked

• s. 15
• s. 15H
• s. 15J
• s. 28A

Regulations

• Reg. 6
• Reg. 3
• Reg. 3(2)
• Reg. 8
• Reg. 28A(2)
• Reg. 9A(1)(e)

Parties

• Intensive Fiscal Services Private Limited (Noticee 1)
• Mr. D K Surana (Noticee 2)

Holding

The Noticees violated SEBI notifications dated March 11, 2013 and August 02, 2013 read with Regulation 3 of CASM Regulations, 2007; Noticee 1 additionally violated Regulation 9A(1)(e) of Merchant Bankers Regulations, 1992 and Noticee 2 violated Regulation 28A(2) of Merchant Bankers Regulations, 1992. A penalty of ₹3,00,000/- was imposed jointly and severally under Section 15HB of the SEBI Act, 1992.

Full text

Adjudication Order in the matter of Intensive Fiscal Services Private Limited Page 2 of 18 APPOINTMENT OF ADJUDICATING OFFICER

Adjudication Order in the matter of Intensive Fiscal Services Private Limited Page 3 of 18 IX Certification for the period beginning March 25, 2015 till September 25, 2023. 5.3. It was also observed from the submisisons of Noticee 2 vide email dated November 24, 2023 that he, being compliance officer of Noticee 1, did not hold “NISM-Series-III A: Securities Intermediaries Compliance (Non-Fund) Continuing Professional Education” certificate at any point of time during the period beginning March 25, 2014 till September 25, 2023. 5.4. Therefore, it was alleged that Noticee 2, by not holding NISM Series III-A and NISM IX certifications, while being the KMP and compliance officer of Noticee 1, has violated the provisions of SEBI notification dated March 11, 2013 and August 02, 2013, read with Regulation 3 of CASM Regulations, 2007. 5.5. In view of the aforesaid, it was also alleged that Noticee 2, being compliance officer of Noticee 1, as required under Regulation 28A(2) of Merchant Bankers Regulations, 1992, did not immediately and independently report to the Board regarding his own non-compliance of CASM Regulations, 2007, even at the time of inspection. 5.6. With respect to Noticee 1, which employed the KMPs including Noticee 2, it was alleged that it had failed to ensure that Noticee 2 obtains requisite NISM certification by passing NISM Series III-A Certification and NISM Series IX Merchant Banking certification within two years from the date of the notifications dated March

Adjudication Order in the matter of Intensive Fiscal Services Private Limited Page 4 of 18 6. Vide letter dated March 27, 2024, the Noticees made common submissions, which are summarized as under: 6.1. The Noticees are cognizant of the importance of upholding the regulatory standards and have always strived to maintain a highly compliant environment at IFSPL. While non-compliance with the regulatory requirements, even though it may have been inadvertent and technical in nature, is not an excuse, Noticee 2, in leading IFPSL in his capacity as the Chairman and Managing Director, has ensured that IFSPL strives to conduct its activities in compliance with the applicable rules, regulations and legal framework. 6.2. Mr. D K Surana (i.e., Noticee 2) is a Chartered Accountant (since 1992) and holds a Diploma in System Audit since 2004. He has vast experience of more than 3 decades in the capital markets industry, on account which he is well versed with the conduct of merchant banking activities. Accordingly, while the erstwhile Compliance Officer i.e., Noticee 2, may not have held the NISM Certification as specified, given his qualifications, knowledge and experience in the capital markets industry, in essence and substance, he was indeed well equipped to fulfil the obligations of a compliance officer under the MB Regulations. 6.3. In so far as the failure to obtain the certification is concerned, the same was on account of an inadvertent oversight. However, upon discovery of the def

Source: SecMarx — sebi:ORDER/BM/DS/2024-25/30275-30276. 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.