sebi:Order/AK/VV/2023-24/26065

SEBI · SEBI · 2021-02-09 · Amit Kapoor, Adjudicating Officer

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Facts / Headnote

Violations held proved; noticee held liable for monetary penalty

Provisions invoked

Regulations

Parties

Holding

The Adjudicating Officer held that the violations alleged against Angel Broking Limited as stock broker and Depository Participant were proved, making the Noticee liable for monetary penalty under Section 15HB of the SEBI Act, Section 23D of the SCRA and Section 19G of the Depositories Act.

Full text

Adjudication Order in respect of Angel Broking Limited Page 2 of 78 of NSE, BSE, MCX, NCDEX with SEBI (single)registration no. INZ000161534 and is also registered with SEBI as a Depository Participant with SEBI Registration No. IN-DP-384-2018. SEBI, based on the findings of the inspection, alleged that ABL had violated various provisions of SEBI Act, 1992 (hereinafter referred to as “SEBI Act”), Securities Contracts (Regulation) Act,1956 (hereinafter referred to as “SCRA”), Depositories Act, 1996 (hereinafter referred to as “Depositories Act”) and various circulars issued by SEBI.

Adjudication Order in respect of Angel Broking Limited Page 3 of 78 inquiry should not be initiated and penalty not be imposed against the Noticee under Section 15HB of the SEBI Act, Section 23D of the SCRA and Section 19G of the Depositories Act, for the alleged violations by the Noticee.

Adjudication Order in respect of Angel Broking Limited Page 4 of 78 4.1.2 It was observed that there is a non-reconciliation of client securities as per back office records with holdings as per Statement of Holding in case of Kotak Mahindra Bank as given in the Table No.2 below: Table No.2: Details of non-reconciliation of client’s securities in case of Kotak Mahindra Bank Date Shortfall in Quantity of client securities pledged with Bank Value of Shortfall (in Rs.) 01-04-2019 86,633 1,61,29,984 15-05-2019 38,717 63,72,896 4.1.3 Noticee did not provide Holding Statement from HDFC Bank and Bajaj Finance w.r.t client securities pledged for 10 sample dates and hence, the same could not be reconciled with back office holding records. Since Pledge Holding Statements from these Banks/NBFC was not received, working for pledging of client securities was done based on back office holdings only. The number of instances were 10 and total amount of misutilisation was Rs.32.9 crores. 4.1.4 NSE, vide email dated October 29, 2021, stated that the Inspecting Officials have considered balances as appearing in the Party Trial Balance provided by Noticee on all sample dates which was the same balance as per client ledgers across all exchanges and all segments which is ideally considered for calculating value of securities that can be pledged with Bank/NBFC. 07-06-2019

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Source: SecMarx — sebi:Order/AK/VV/2023-24/26065. 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.