sebi:SRP/JP/AO/265/2012
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Facts / Headnote
Penalty of Rs. 50,000 imposed on the Noticee for violation of clause A(2) of the Code of Conduct under Schedule II read with regulation 7 of the SEBI (Stock Brokers and Sub-brokers) Regulations, 1992
Provisions invoked
- s. 15
Regulations
- Reg. 7
Parties
- Stock broker (name not specified in text)
Holding
The Noticee stock broker was held to have violated clause A(2) of the Code of Conduct (Schedule II) read with regulation 7 of the Brokers Regulations by failing to exercise due care, skill and diligence in the conduct of its business, and a penalty of Rs. 50,000 was imposed under section 15HB of the SEBI Act.
Full text
Page 2 of 12 3. In view of the said observations/findings of the investigations, it has been alleged that the Noticee has failed to exercise due care, skill and diligence in the conduct of its business and has thereby violated the provisions of clause A (2) of the code of conduct for stock brokers specified under Schedule II read with regulation 7 of the SEBI (Stock Brokers and Sub- brokers) Regulations, 1992 (hereinafter referred to as ‘Brokers Regulations’).
Page 3 of 12 • Also, the said clients had traded in several scrips before, during and after the investigation period. Average daily trades of the Noticee round up to in some thousands which is outcome from its proprietary as well as clientele trading activity in several scrips. It is, therefore, humanly impossible to check and verify each transaction of each of its client especially when there were more than 20,000 clients on whose behalf transactions were executed during the period of investigation. Similarly, to determine the intent of each of its client behind their every transaction is nearly impossible.
Page 4 of 12 The stock-broker holding a certificate shall at all times abide by the Code of Conduct as specified at Schedule II.
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Source: SecMarx — sebi:SRP/JP/AO/265/2012. 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.