sebi:Order/VV/JR/2020-21/8583
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Facts / Headnote
Violations established against the Noticee on multiple charges; penalty determination not stated in the provided text
Provisions invoked
- s. 15
- s. 12
- s. 15H
- s. 15J
- s. 28A
- s. 23J
- s. 23
- s. 23I
- s. 23D
Regulations
- Reg. 9
- Reg. 9(f)
Parties
- India Advantage Securities Pvt. Ltd.
Holding
The Noticee was found to have violated Section 23D of SCRA read with SEBI circulars on client fund segregation, violated SEBI/NSE circulars on funding beyond T+2+5, violated mandatory quarterly settlement requirements, and violated the Code of Conduct read with Regulation 9(f) of the Brokers Regulations for engaging in business other than securities. One allegation regarding DPC charged despite credit balance was not established.
Full text
In the matter of India Advantage Securities Pvt. Ltd. Page 2 of 24 Brokers) Regulations, 1992 (hereinafter referred to as “Brokers Regulations”) and various SEBI circulars and NSE circular.
In the matter of India Advantage Securities Pvt. Ltd. Page 3 of 24 CONSIDERATION OF ISSUES AND EVIDENCE 5. I have carefully perused the charges levelled against the Noticee in the SCN, its reply and the material / documents available on record. In the instant matter, the following issues arise for consideration and determination:-
In the matter of India Advantage Securities Pvt. Ltd. Page 4 of 24 A) MISUSE OF CLIENTS’ FUNDS Allegation: i. It was alleged that on 38 out of 40 dates, broker had misused client funds. Misuse of client funds ranges from 2.42% to 69.76% of funds of credit balance clients. ii. It was further alleged that that funds of credit balance clients have been used for purpose of debit balance clients. The broker has misused the credit client’s fund in the range of the amount `3,99,32,376 to `12,88,81,542 for the selected sample days. iii. Further, it was alleged that the broker has availed temporary overdraft facility in Union Bank of India – CD NSE CLIENT (A/c No. 317901011012634) on three dates against company’s property as collateral to the extent of ` 2 crores. iv. In view of the above, it was alleged that the Noticee has violated section 23D of SCRA read with clause 1 of annexure of SEBI circular SMD/SED/CIR/93/23321 dated November 18, 1993, clause 3 of Annexure of SEBI/HO/MIRSD/MIRSD2/CIR/P/2016/95 dated September 26, 2016.
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Source: SecMarx — sebi:Order/VV/JR/2020-21/8583. 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.