sebi:Order/BM/DS/2024-25/31066
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Facts / Headnote
Penalty imposed on the Noticee for violations of SEBI circulars and Exchange circulars relating to settlement of running account of client funds, short collection of upfront margin, securities of credit balance clients, KYC, enhanced supervision reporting, risk based supervision, UCC verification, margin trading facility, and non-cooperation/authenticity of data with inspection team.
Provisions invoked
- s. 15A
- s. 15
- s. 15H
- s. 15J
- s. 28A
Regulations
- Reg. 199
- Reg. 21
Parties
- Stockholding Services Limited (Formerly SHCIL Services Limited)
Holding
The Noticee, Stockholding Services Limited, was found to have violated multiple SEBI and Exchange circulars relating to settlement of running account of client funds, margin collection and reporting, KYC, enhanced supervision reporting, risk based supervision, UCC verification, margin trading facility, cyber security, and non-cooperation with inspection, and a penalty of ₹10,00,000 was imposed under Section 15HB of the SEBI Act, 1992.
Full text
Adjudication Order in the matter of Stockholding Services Limited (Formerly SHCIL Services Limited) Page 2 of 87 Stock Brokers Regulations, 1992 and applicable SEBI and Exchange Circulars. The extracts of violations alleged to have been committed by the Noticee and the corresponding provisions of Stock Brokers Regulations, 1992 and SEBI and Exchange Circulars are given in the tabulation below: Table 1 Sr. No. Alleged Violations Regulatory Provisions 1 Monthly/Quart erly Settlement of Funds and Securities Clause12 of Annexure A of SEBI circular SEBI/MIRSD/SE/Cir- 19/2009 dated December 03, 2009 and the exchange notice no. 20091204-7 dated December 04, 2009, 20100203-30 dated February 3, 2010, 20100617-15 dated June 17, 2010, 20131029-15 dated October 29, 2013 and 20150413-3- dated April 13, 2015, Clause 8 of Annexure of SEBI circular ref. no. SEBI/HO/MIRSD/MIRSD2/CIR/P/2016/95 dated September 26, 2016 issued vide Exchange Notice No. 20160927-41 dated September 27, 2016, Clause 5.1 of SEBI circular ref. no. SEBI/HO/MIRSD/DOP/P/CIR/2021/577 dated June 16, 2021 issued vide Exchange notice no. 20210616-41 dated June 16, 2021, 20210831-40 dated August 31, 2021, 20220331-53 dated March 31, 2022 and Clause 4 of SEBI Circular ref. no. SEBI/HO/MIRSD/DoP/P/CIR/2022/101 dated July 27, 2022 issued vide 20220727-48 dated July 27, 2022.
Adjudication Order in the matter of Stockholding Services Limited (Formerly SHCIL Services Limited) Page 3 of 87 Sr. No. Alleged Violations Regulatory Provisions dated July 27, 2022. & Point No. (3) of Clarification of Statement of Accounts of Exchange Notice No.20210205-30 dated February 05, 2021.
Adjudication Order in the matter of Stockholding Services Limited (Formerly SHCIL Services Limited) Page 4 of 87 Sr. No. Alleged Violations Regulatory Provisions transferred to CUSA 8 Client Registration Process (KYC and KRA Process) Annexure-2 of Point No. 3(ii)(a) of SEBI Circular CIR/MIRSD/16/2011 dated August 22, 2011 and Annexure of Point No. 3(ii)(a) of Annexure issued vide Exchange notice 20110823-4 dated August 23, 2011.
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