sebi:WTM/AB/SEBI/MIRSD/HO/35/2019
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Facts / Headnote
Ex parte ad interim directions issued against KSBL pending forensic audit, including prohibition on onboarding new clients and freeze on POA-based instructions and transfers from DP account no. 11458979
Provisions invoked
- s. 19
Regulations
- Reg. 9
- Reg. 35
- Reg. 58
- Reg. 79
Parties
- Karvy Stock Broking Limited
Holding
SEBI prima facie found KSBL misused clients' securities and issued ex parte interim directions prohibiting KSBL from taking new clients, restraining depositories from acting on KSBL's POA instructions, and freezing transfers from DP account no. 11458979 except to fully-paid beneficial owners under NSE supervision pending forensic audit.
Full text
Ex parte ad interim order in the matter of Karvy Stock Broking Limited Page 2 of 12 (i) KSBL did not report the DP account no. 11458979, named KARVY STOCK BROKING LTD (BSE) in the filings made by it from January, 2019 to August, 2019. The said DP account was observed to be categorised as Beneficiary Client and was opened on December 20, 2000;
Ex parte ad interim order in the matter of Karvy Stock Broking Limited Page 3 of 12 5 out of the respective 9 client accounts amounting to Rs. 228.07 Crore during the period from June 1, 2019 to September 8, 2019. KSBL had undertaken the recovery/purchase of securities to recoup the securities shortfall. KSBL has thus violated SEBI circular no. SMD/SED/CIR/93/23321 dated November 18, 1993 and Clauses A (1) & (3) of the code of conduct prescribed for Stock Brokers under Regulation 9 of SEBI (Stock Brokers & Sub Brokers) Regulations, 1992 (hereinafter referred to as “Stock Broker Regulations”);
Ex parte ad interim order in the matter of Karvy Stock Broking Limited Page 4 of 12 S. No. Client PAN Client Code Client Name Relation with KSBL 4 AABCB8927H A020005 BUOYANT INSURANCE SERVICES PRIVATE LIMITED domain name of karvy.com and having common addresses in the UCC records.
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Source: SecMarx — sebi:WTM/AB/SEBI/MIRSD/HO/35/2019. 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.