sebi:WTM/KMA/90/SRO/MIRSD/06/2009
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Facts / Headnote
Proceeding disposed of with advice to strictly adhere to regulations and circulars; no penalty imposed
Provisions invoked
- s. 19
Regulations
- Reg. 28(2)
Parties
- Rashmi Gem Stocks & Shares Private Limited
Holding
The Designated Authority found the stock broker guilty of contravening Clause B(2) of the Code of Conduct, Rule 7 of the Stock Brokers and Sub-brokers Regulations, 1992, Rule 4(e) of the Stock Broker & Sub-brokers Rules, 1992, and SEBI Circular ref. SMD/POLICY/CIRCULAR 3/97, and recommended a warning. The proceeding was disposed of with advice to strictly adhere to the Regulations and Circulars, with the charge of non-redressal of investor complaints dismissed on benefit of doubt.
Full text
Page 2 of 7 with subsequent orders dated December 20, 2005, July 19, 2007 and December 10, 2008, appointed an Enquiry Officer/Designated Authority (hereinafter referred to as the Enquiry Officer) under the provisions of Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 (hereinafter referred to as Enquiry Regulations) and the Securities and Exchange Board of India (Intermediaries) Regulations, 2008 (hereinafter referred to as the Intermediaries Regulations) to conduct an enquiry into the alleged violations of the stock broker, observed during the inspection. The Enquiry Regulations was repealed by the Intermediaries Regulations and anything done and any action taken under the Enquiry Regulations were saved and were deemed to have been done or taken or commenced under the corresponding provisions of the Intermediaries Regulations.
Page 3 of 7 vide its letter dated April 17, 2009, replied to the show cause notice, inter alia stating that the irregularities outlined in the report dated March 19, 2009 are procedural in nature and no disproportionate gain or unfair advantage had accrued to it and requested that it be exonerated from the ‘show cause notice’. Subsequently, an opportunity of hearing was granted to the stock broker on June 19, 2009, when Mr. Venkatesh N. Murthy, Director and Authorised Representative, appeared on behalf of the stock broker and made his
Page 4 of 7 (M/s. Sarayu & Co. and M/s. Jasstock Investment Co.) who were also sub- brokers (unregistered) in the National Stock Exchange of India Limited (NSE). Dealing with unregistered sub-brokers was violative of Rule 3 of Stock Brokers Rules read with SEBI circular ref. SMD/POLICY/CIR-3/98 dated January 16, 1998.
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Source: SecMarx — sebi:WTM/KMA/90/SRO/MIRSD/06/2009. 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.