sebi:WTM/GM/MIRSD/MIRSD1/13024/2021-22
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Provisions invoked
- s. 19
- s. 12
Regulations
- Reg. 7
- Reg. 21(1)
- Reg. 18B
- Reg. 30
- Reg. 12
- Reg. 28
- Reg. 27
Parties
- JHP Securities Pvt. Ltd.
Holding
On the excerpted issues, it was held that JHP Securities dealt with Mahalaxmi Shares and Securities prior to its registration as remisier on May 3, 2007 and allotted trading terminals at the remisier's Himmat Nagar office while submitting false/misleading information about branch status and terminal operators, violating Regulation 18B, Section 12, SEBI Circulars and Clauses A(1), A(2), A(5) and C(6) of the Broker Code of Conduct.
Full text
Order in the matter of JHP Securities Pvt. Ltd. Page 2 of 39 of India Act, 1992 (hereinafter referred to as "SEBI Act"), SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 (hereinafter referred to as "Stock Broker Regulations"), various Circulars issued by SEBI from time to time and Securities Contracts (Regulations) Rules, 1957 (hereinafter referred to as "SCR Rules").
Order in the matter of JHP Securities Pvt. Ltd. Page 3 of 39 JHP. In order to proceed in the matter, a personal hearing was scheduled on September 27, 2019 and the same was communicated to the Noticee vide hearing notice dated April 2, 2019. The Noticee filed a reply dated April 4, 2019 stating that it had sought certain documents including a copy of the SCN, and the same had not been received by it. The Noticee requested that the documents be provided to them before the personal hearing. While the documents had already been provided to the Noticee, the same were again provided to the Noticee vide email dated September 13, 2019. Thereafter, a personal hearing was held on September 27, 2019, wherein the Noticee requested copies of relevant documents relied on by SEBI. The documents were provided by SEBI and a personal hearing was again scheduled on October 14, 2019. The scheduled hearing was thereafter adjourned on the request of the Noticee and rescheduled to April 29, 2020, December 9, 2020, January 21, 2021 and April 29, 2021. The Noticee appeared for the hearing on April 29, 2021, represented by its employee, Mr. Bhavesh Shah, and stated that it was not in a position to argue on the merits of the case on account of the Covid-19 pandemic and requested for a date in June 2021. The request of the Noticee was acceded to and the hearing was scheduled for June 23, 2021. However, once again the Noticee sought an adjournment of two weeks. The request of the Noticee was granted, an
Order in the matter of JHP Securities Pvt. Ltd. Page 4 of 39 submissions. The Noticee also filed additional written submission vide letter dated July 19, 2021. The submissions of the Noticee, inter alia, are given below: (i) The Noticee had sought various documents which were not provided by SEBI and as a result of the same it was unable to file a reply in the matter before the DA. (ii) There has been inordinate delay in issuing the SCN and such delay is fatal to the proceedings. (iii) The rent for the Himmat Nagar Branch at the rate of Rs.5,000 per month was paid by the Noticee and the same is reflected in the ledger of the Noticee. (iv) SEBI’s inspection in 2005-06 acknowledged the Himmat Nagar Branch as an office of the Noticee. (v) Mahalaxmi Shares and Securities (MSS) acquired a remisier certificate from BSE on May 3, 2007 and consequent thereto operated as a remisier of JHP from the Himmat Nagar Branch. Hence the allegation that MSS was operating as an unregistered sub-broker is unwarranted and lacks substance. (vi) Sharing brokerage with a person other than a remisier was permitted by Bye Law no. 22 of BSE. (vii) The allegation that JHP shared brokerage with MSS is not backed by any material substance and evidence. JHP never paid/ shared any sum amounting to brokerage prior to May 3, 2007.
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Source: SecMarx — sebi:WTM/GM/MIRSD/MIRSD1/13024/2021-22. 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.