sebi:PKB/AO-26/2010

SEBI · SEBI · 2003-12-16 · P. K. Bindlish, Adjudicating Officer

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Facts / Headnote

Penalty of Rs. 50,000 imposed under Section 15B; no penalty under Sections 15F(a) and 15F(b)

Provisions invoked

• s. 11B
• s. 11(4)
• s. 11
• s. 15B
• s. 15
• s. 15I
• s. 15J
• s. 15F

Regulations

• Reg. 200
• Reg. 27
• Reg. 5A

Parties

• Interface Brokerage and Research Ltd.

Holding

The Noticee was held liable under Section 15B for failure to maintain client registration forms and agreements and penalized Rs. 50,000, while allegations under Sections 15F(a) regarding contract notes and 15F(b) regarding delivery of securities were not established.

Full text

Adjudication Order in respect of Interface Brokerage and Research Ltd. Page 2 of 15 March 2, 2010 vide Order dated December 16, 2003 to inquire into and adjudicate under sections 15B, 15F(a) and 15F(b) of the Act for the alleged failure by the Noticee to obtain/maintain client registration forms/agreement/database, failure to issue contract notes in the form and manner prescribed and delay in the delivery of securities and payment to it’s clients. Pursuant to the transfer of Shri A. Chandrasekhar Rao, Shri Amit Pradhan was appointed as the Adjudicating Officer vide Order dated December 20, 2005. Pursuant to the transfer of Mr. Amit Pradhan, Mr. D. Sura Reddy was appointed as the Adjudicating Officer vide Order dated July 19, 2007. Pursuant to transfer of Mr. D. Sura Reddy, the undersigned was appointed as the Adjudicating Officer vide Order dated December 10, 2008.

Adjudication Order in respect of Interface Brokerage and Research Ltd. Page 3 of 15 March 2, 2010 Enquiry Officer immediately before the commencement of the SEBI (Stock Brokers and Sub Brokers) (Second Amendment) Regulations, 2003, being an enquiry in respect of a violation which can be adjudicated under Chapter VIA of the Act may be transferred by the Chairman or the member by an order in writing to an Adjudicating Officer under section 15I of the Act. Therefore, the Noticee contended that there was apparent contradiction and overstepping in terms of reference of appointment of Enquiry and Adjudicating Officer and that the Order of the appointing authority appointing Enquiry Officer stands vacated and he is discharged from the Office of Enquiry Officer, the Noticee relied on an Order of SAT to explain how SEBI though has power to conduct enquiry under Enquiry Regulations as well as under the Adjudication Rules, it can conduct enquiry in either of the Regulations at a time. In this regard, I may note that on perusal of the extracts of the SAT Order so relied upon by Noticee, I find that the SAT Order was dealing with the question of whether the enquiry referred to in section 11 also includes the enquiry under Enquiry Regulations and in that case, SAT opined that SEBI can order an enquiry either for the purpose of imposing penalty under Chapter VIA of the Act for which adjudicating officer shall be appointed or it may order an enquiry under Enquiry Regulations. Therefore, SAT

Adjudication Order in respect of Interface Brokerage and Research Ltd. Page 4 of 15 March 2, 2010 any person associated with the securities market with a view to protect the interest of the investors and the market. The appellant was found indulging in manipulative trades and was, therefore, debarred from accessing the securities market for a period of 2 years. For the same wrong, the Act empowers the Board to impose monetary penalty as well by initiating adjudication proceedings. In this view of the matter, we find nothing wrong with the Board initiating proceedings for the imposition of monetary

Source: SecMarx — sebi:PKB/AO-26/2010. 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.