sebi:QJA/SP/MIRSD/MIRSD_DPIEA/23166/2022-23
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Cancellation of certificate of registration of Kaynet Finance Limited as Stock Broker with Registration no. INB/F231276339
Provisions invoked
- s. 19
- s. 12(3)
Regulations
- Reg. 27
- Reg. 5
- Reg. 23
- Reg. 24
- Reg. 25
- Reg. 26
- Reg. 27(1)
- Reg. 32(2)
- Reg. 27(i)
- Reg. 5(a)
Parties
- Kaynet Finance Limited
Holding
SEBI cancelled the certificate of registration of Kaynet Finance Limited as Stock Broker with Registration no. INB/F231276339 because it ceased to be a member of NSE with effect from February 13, 2020 and is no longer a member of any recognized stock exchange.
Full text
Order in the Matter of Kaynet Finance Limited Page 2 of 9 Depository Services Ltd. (hereinafter referred to as “CDSL”) had conducted a comprehensive joint inspection for the period April 01, 2018 to July 30, 2019 (hereinafter referred to as “inspection period”) of the Noticee. Pursuant to completion of the said inspection, one of the action recommended with respect to the Noticee was to conduct Enquiry in view of NSE declaring the Noticee defaulter on February 13, 2020.
Order in the Matter of Kaynet Finance Limited Page 3 of 9 b. Further, Chapter V of Intermediaries Regulations lays down the procedure of action in case of Default and Manner of Suspension or Cancellation of Certificate of any person who has been granted a certificate of registration under the Act or Regulations made thereunder. Therefore, it is very clear that unless the registration granted by SEBI is cancelled by SEBI, any intermediary who has been granted registration by SEBI remains within the regulatory purview of SEBI. Proceedings conducted by Exchanges or Depositories are distinct from the proceedings conducted by SEBI and so are the consequential actions. Cancellation of membership by NSE does not absolve the Noticee from the actions that can be taken by SEBI under Intermediaries Regulations. Accordingly, the contention of the Noticee that by virtue of NSE terminating its membership, the Noticee is out of regulatory purview of SEBI is not acceptable.
Order in the Matter of Kaynet Finance Limited Page 4 of 9 4. In view of the above, the Enquiry Report observed that the Noticee ceased to be Member of NSE with effect from February 13, 2020. Accordingly, the Enquiry Report has made the following recommendation: “In view of the above observations, it is clear that the Noticee is no longer a member of any Stock Exchange, as a broker/ trading member. Therefore, in terms of Regulation 26 of the Intermediaries Regulations, it is recommended that the registration of the Noticee i.e., Kaynet Finance Limited as Stock Broker with Registration no. INB011056737 may be cancelled.”
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:QJA/SP/MIRSD/MIRSD_DPIEA/23166/2022-23. 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.