sebi:WTM/KMA/MIRSD/15/11/2008
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Facts / Headnote
Suspension of certificates of registration Nos. INS230489812 and INS231334819 for a period of three months, effective on expiry of twenty one days from the date of the order
Provisions invoked
- s. 19
- s. 12(1)
Regulations
- Reg. 4
- Reg. 28(2)
Parties
- Mr. Sanjiv K. Shah (Trade Name: Aakash Investment Consultancy)
Holding
The certificates of registration of sub-broker Mr. Sanjiv K. Shah (Trade Name: Aakash Investment Consultancy) were suspended for three months for acting without registration, executing client trades in proprietary code and other violations of the Act, Broker Regulations and SEBI circulars.
Full text
Page 2 of 6 observed certain shortcomings in the activities of the sub broker such as, acting as a sub broker without certificate of registration, execution of trades on behalf of the clients in the proprietary code of the sub broker etc. Though, the copy of the said inspection report was forwarded to the sub broker, he had failed to give its comments in respect of the irregularities observed therein. Thereafter, SEBI appointed an Enquiry Officer vide order dated May 2, 2006 under the provisions of Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 (since repealed) against the sub broker to enquire into the alleged contravention of the provisions of Securities and Exchange Board of India Act, 1992 (Act), Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Regulations, 1992 (Broker Regulations) etc.
Page 3 of 6 3. I have considered the Enquiry Report, show cause notice issued to the sub broker, the oral as well as written submissions made by him and other materials available on record. Though, Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer And Imposing Penalty) Regulations, 2002 was repealed with effect from the notification of Securities and Exchange Board of India (Intermediaries) Regulations, 2008, anything done and any action taken under the said Enquiry Regulations shall be deemed to have been done or taken or commenced under the corresponding provisions of Securities and Exchange Board of India (Intermediaries) Regulations, 2008. One of the charges leveled against the sub broker is that he had dealt in securities as a sub broker without holding a certificate of registration from SEBI. From the available materials on records, I note that the sub broker, vide letters dated January 11, 2005 and January 12, 2005, stated that he had started trading activities as a sub broker under the trade name AIC from January 1,
Page 4 of 6 stated above. Further, the Enquiry Officer also observed that the sub broker violated the provisions of SEBI Circular dated June 16, 1998 by allowing operation of the trading terminals (with regard to F&O operations) by persons without NSE’s Certification in Financial Markets. In terms of the said circular, the trading members shall be required to have qualified approved user and sales persons who have passed a Certification Programme approved by SEBI. Thereafter SEBI vide circular dated June 29, 1998 approved the NSE’s Certification in Financial Markets, in continuation of its earlier circular dated June 16, 1998. Admittedly, the sub broker was not holding the aforesaid certificate during the relevant period of time.
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Source: SecMarx — sebi:WTM/KMA/MIRSD/15/11/2008. 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.