sebi:Order/KS/AA/2020-21/8314
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Facts / Headnote
The Adjudicating Officer found the Noticee liable for violations concerning use of credit-balance clients’ funds, incorrect enhanced-supervision reporting, and pledging clients’ securities beyond the respective clients’ obligations, and imposed a monetary penalty. The penalty amount is not stated in the supplied text.
Provisions invoked
- s. 12
- s. 15H
- s. 15J
- s. 12A
- s. 28A
- s. 23J
- s. 23
- s. 23D
Parties
- Sushil Financial Services Pvt. Ltd.
Holding
The Adjudicating Officer found that the Noticee had used credit-balance clients’ funds toward debit-balance clients’ settlement obligations, incorrectly reported enhanced-supervision data on two dates, and had not substantiated its explanation for all instances of excess pledging of clients’ securities. The Noticee was held liable for monetary penalty under Section 23D of the SCRA; the amount is absent from the supplied text.
Full text
Page 2 of 31 comprehensive joint inspection of the broking and depository participant operations of Sushil Financial Services Pvt. Ltd. (hereinafter referred to as “SFSPL / Noticee”). The period of inspection was from April 2017 to September 2018 (hereinafter referred to as “IP”).
Page 3 of 31 as “SCR Adjudication Rules”) for the above alleged violations committed by the Noticee. SHOW CAUSE NOTICE, REPLY AND HEARING
Page 4 of 31 of the Noticee. It was observed from the above analysis that the Noticee had mis-used the credit clients’ funds in the range from Rs.6.37 Crore to Rs.44.38 Crore for the selected sample days. Since G value is found to be lesser than D, the Noticee has possibly utilised funds of credit balance clients towards settlement obligations of debit balance clients to the extent of value of G. Details of the said instances are enclosed as Annexure H. It was also observed from the details given in Annexure G that the values of T and ‘J’ were also found to be negative indicating that no credit clients' funds has been utilised towards margin obligations of debit balance clients and proprietary margin obligation in the sample period. (b) It was further observed that the Noticee had provided incorrect details of client balances/ collaterals to the exchange. Upon verification of the reported data, it was found that the value of ‘G’ was also found to be negative on the aforesaid dates viz. August 03, 2018 & August 31, 2018. (c) The above referred instances indicated that the Noticee had not segregated client funds and mis-utilized credit clients’ funds for other purposes. In view of the same, it is alleged that the Noticee has violated the provisions of Section 23D of SCRA read with Clause 1 of Annexure of SEBI Circular SMD/SED/CIR/93/23321 dated November 18, 1993 and Clause 3 of Annexure of SEBI Circular SEBI/HO/MIRSD/MIRSD2/CIR/P/2016/95 dated September 26, 2016. B. Pledging of
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Source: SecMarx — sebi:Order/KS/AA/2020-21/8314. 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.