sebi:Order/BD/BM/2019-20/6195
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Facts / Headnote
Violation established - Noticee held liable for non-segregation and misutilisation of client funds and securities
Provisions invoked
- s. 15
- s. 12
- s. 15H
- s. 15J
- s. 28A
- s. 23J
- s. 23
- s. 23D
Regulations
- Reg. 4
- Reg. 199
- Reg. 26
Parties
- Reflection Investments
Holding
The Adjudicating Officer held that Reflection Investments failed to segregate and misutilised client funds and securities, including through artificial internal netting with partner client code V0001, in violation of SEBI circulars and Clauses A(1, 2 & 3) of the Stock Brokers Code of Conduct.
Full text
Adjudication Order against Reflection Investments Page 2 of 31 2. Based on the findings of the inspection, SEBI initiated Adjudication Proceedings against the Noticee under the provisions of Section 15HB of the SEBI Act and Regulation 26(xiii) of Stock Brokers Regulations read with Section 23 D of Securities Contracts (Regulation) Act, 1956 (hereinafter referred to as SCRA 1956) for the alleged violation of SEBI Circular No. MRD/DoP/SE/Cir-11/2008 dated April 17, 2008 read with SEBI Circular No. SMD/SED/CIR/93/23321 dated November 18, 1993 and Clause A (1, 2 & 3) of Stock Broker Regulations.
Adjudication Order against Reflection Investments Page 3 of 31 5. Noticee, vide letter dated October 18, 2019 filed the reply to the SCN denying the violations alleged against it.
Adjudication Order against Reflection Investments Page 4 of 31 9. I note that Reflection is a SEBI registered intermediary and offers broking services in the Cash and Future & Option and Currency Derivative segments of National Stock Exchange of India Ltd. The registration details are as under:
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