sebi:Order/PM/AN/2020-21/10118

SEBI · SEBI · 1993-11-18 · Prasanta Mahapatra, Adjudicating Officer

Reviewed by Varun Matlani, Advocate — Securities Lawyer practicing in SAT and SEBI

Facts / Headnote

Violations established; penalty imposed

Provisions invoked

Regulations relied on

Parties

Holding

The Adjudicating Officer held that M/s Asit C Mehta Investment Intermediaries Ltd. violated Section 23D of the SCRA and the cited SEBI Circulars, Stock Brokers Regulations and NSE Circulars, and imposed a penalty of Rs. 27,00,000 under Section 23D of the SCRA and Section 15HB of the SEBI Act.

Full text

Adjudication Order in respect of M/s Asit C Mehta Investment Intermediaries Ltd. Page 2 of 44 India Act, 1992 (hereinafter referred to as “SEBI Act”) for the alleged violations of provisions of the below mentioned SEBI Regulations/ Circulars and NSE Circulars: (i) Section 23D of the SCRA read with (r/w) clause 1 of Annexure of SEBI Circular SMD/SED/CIR/93/23321 dated November 18, 1993 (hereinafter referred to as SEBI Circular dated November 18, 1993) and clause 3 of Annexure of SEBI Circular SEBI/HO/MIRSD/MIRSD2/CIR/P/2016/95 dated September 26, 2016 (hereinafter referred to as SEBI Circular dated September 26, 2016) (ii) Clause 3.2 of Annexure of SEBI Circular dated September 26, 2016 (iii) Clause 2 of Annexure of SEBI Circular dated September 26, 2016 (iv) SEBI Circular SEBI/MIRSD/SE/CIR-19/2009 dated December 3, 2009 (hereinafter referred to as SEBI Circular dated December 3, 2009) and Clause 8.1 of Annexure of SEBI Circular dated September 26, 2016 (v) Clause A(5) of Schedule II r/w regulation 9(f) of SEBI (Stock Brokers) Regulations, 1992 (hereinafter referred to as Stock Brokers Regulations) r/w NSE Circular no. NSE/MEMB/3574 dated August 29, 2002 (hereinafter referred to as NSE Circular dated August 29, 2002), NSE Circular no. NSE/MEMB/3635 dated September 25, 2002 (hereinafter referred to as NSE Circular dated September 25, 2002) and NSE/MA/22732 dated February 13, 2013 (hereinafter referred to as NSE Circular dated February 13, 2013) (vi) Clause 2.4.2 of Annexure of

Adjudication Order in respect of M/s Asit C Mehta Investment Intermediaries Ltd. Page 3 of 44 SHOW CAUSE NOTICE, REPLY AND HEARING

Adjudication Order in respect of M/s Asit C Mehta Investment Intermediaries Ltd. Page 4 of 44 needs to be considered for liquid funds against Creditors’ dues. Further, the unutilized overdraft balance was also not considered in the calculations. (iii.) However, as per enhanced supervision norms, securities received from clients and other non-cash margins, unutilized overdraft balance are not

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