sebi:Order/SM/DD/2022-23/25037-25038
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Violations established against Noticee 1 (Karvy Capital Limited) and Noticee 2 (Whole Time Director); penalty of Rs. 6,00,000 imposed jointly and severally under Section 15HB of SEBI Act; allegations against Noticees 3 to 6 held not established
Provisions invoked
- s. 15
- s. 15H
- s. 27
- s. 15J
- s. 15F
- s. 28A
- s. 27(1)
- s. 149(12)
- s. 2(60)
Regulations
- Reg. 13
- Reg. 16(5)
- Reg. 199
- Reg. 15
- Reg. 14
- Reg. 14(1)
- Reg. 23
- Reg. 2(d)
- Reg. 14(2)(a)
- Reg. 23A
- Reg. 14(1)(b)
Parties
- M/s. Karvy Capital Limited
- Mr. Kedar Deshpande
- Noticee 3
- Noticee 4
- Noticee 5
- Noticee 6
Holding
Noticee 1 and Noticee 2 violated PMS Regulations and applicable SEBI Circulars and are liable jointly and severally to penalty under Section 15HB of SEBI Act, while the same allegations against Noticees 3 to 6 (non-executive directors) do not stand established.
Full text
Adjudication Order in the matter of M/s. Karvy Capital Limited. Page 2 of 54 3. Based on the findings of inspection and the reply of Noticee 1, SEBI observed that Noticees have violated various provisions of SEBI (Portfolio Managers) Regulations, 1993 (hereinafter referred to as “Portfolio Managers Regulations,1993” / “PMS Regulations,1993”) and applicable SEBI Circulars. Accordingly, SEBI initiated adjudication proceedings against Noticees under Section 15-I of Securities and Exchange Board of India Act, 1992 (hereinafter referred to as “SEBI Act”) to inquire into and adjudge under Section 15HB of SEBI Act, the alleged violations of the following provisions by Noticees:
Adjudication Order in the matter of M/s. Karvy Capital Limited. Page 3 of 54 1. As per Regulation 16(5) of Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993 (herein after referred to as “PMS Regulations, 1993”), Portfolio Manager shall not keep any open position in respect of allocation of sales or purchases affected in day. During the inspection, the transaction statements of the Noticee1’s pool accounts were verified. It was observed that on several instances, Noticee 1 had kept open positions in respect of allocation of sales or purchases affected in a day. The list of open positions for 5-12 days are given below:
Adjudication Order in the matter of M/s. Karvy Capital Limited. Page 4 of 54 observed that there were more than 500 clients who had corpus of less than Rs. 25 lakh. The list of such clients is given as Annexure-4.
You have read the preview. Create a free account to read the full order, track this party, and analyse it in Ontology.
Free accounts include 10 searches/day with full order access.
Source: SecMarx — sebi:Order/SM/DD/2022-23/25037-25038. 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.