sebi:Order/PM/GD/2022-23/17239-17249
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Facts / Headnote
Penalties imposed on all 11 Noticees for violation of Regulations 8 and 9 of MIMPS Regulations under Section 23H of SCRA
Provisions invoked
- s. 11(2)
- s. 4A
- s. 23
- s. 23H
- s. 23J
- s. 4B
- s. 14
- s. 25
- s. 14(1)
- s. 176
Regulations
- Reg. 3
- Reg. 7
- Reg. 13
- Reg. 9
- Reg. 8
- Reg. 2
- Reg. 2(1)(e)(2)
- Reg. 52
- Reg. 9(2)(i)
Holding
The Noticees were found to have violated Regulations 8 and 9 of the MIMPS Regulations by acting in concert to collectively hold 21.140% of ICSE's equity shareholding, exceeding the 5% limit permitted for persons acting in concert without SEBI scrutiny. Monetary penalties were imposed under Section 23H of SCRA on all 11 Noticees.
Full text
Adjudication order in the matter of Interconnected Stock Exchange of India Ltd. Page 2 of 37 BACKGROUND 1. Securities and Exchange Board of India (hereinafter referred to as “SEBI”) had examined certain irregularities during the regular inspection of Interconnected Stock Exchange of India Ltd (hereinafter referred to as “ICSE”) and into the possible violation of the provisions of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as ‘SEBI Act’), Securities Contracts (Regulation) Act, 1956 (hereinafter referred to as ‘SCRA’) and various Rules and Regulations made thereunder by Religare Technova Ltd. (now known as Dion Global Solutions Ltd.), Acme Chern Ltd., Shubh Labh India Marketing & Consultants Pvt. Ltd., Arch Finance Ltd., Decent Financial Services Pvt. Ltd., Decent Surveyors Pvt. Ltd., Hastings Marketing Pvt. Ltd., Hi-worth Securities Pvt. Ltd., Ospro Financial & Investment Pvt. Ltd., Breakthrough Millenium Trading & Marketing Pvt. Ltd. and Shyam Stock & Financiers Pvt. Ltd. (hereinafter individually referred by their respective names and collectively referred to as the Noticees). It was observed that ICSE was incorporated on January 22, 1998 under Section 25 of the Companies Act, 1956 as a Company limited by Guarantee vide registration no. 11- 113147 issued by the Registrar of Companies, Maharashtra. ICSE was granted recognition as a stock exchange by SEBI on November 18, 1998 under Section 4 of SCRA. Later, it was observed that ICSE became a
Adjudication order in the matter of Interconnected Stock Exchange of India Ltd. Page 3 of 37 of SCRA, Securities Contracts (Regulation) Rules, 1957 (hereinafter referred to as ‘SCRA Rules’), SEBI Act, Circulars of SEBI and other Rules, Memorandum and Articles of Association and Bye-laws of ICSE. The major focus of inspection was on the overall management, administrative monitoring and control, monitoring of the working of the subsidiaries by ICSE and to a limited extent about the financial status of the stock exchange. It was also observed that SEBI had received a proposal from ICSE for re-commencement of trading. Therefore, the inspection was also focused on the manner of granting contracts for development of trading solutions.
Adjudication order in the matter of Interconnected Stock Exchange of India Ltd. Page 4 of 37 SHOW CAUSE NOTICE, HEARING AND REPLY
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