sebi:WTM/KMA/MIRSD/322/12/2010
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Facts / Headnote
Cancellation of all certificates of registration granted to Sunchan Securities Limited as a stock broker
Provisions invoked
- s. 19
- s. 12(1)
Regulations
- Reg. 7
- Reg. 6
- Reg. 21(1)
- Reg. 28(2)
- Reg. 2
- Reg. 6A(1)(e)
- Reg. 6A
- Reg. 6A(1)(b)
Parties
- Sunchan Securities Limited
Holding
The Whole Time Member of SEBI cancelled all four certificates of registration granted to Sunchan Securities Limited as a stock broker, finding it guilty of contravening multiple provisions of the SEBI Act, Stock Brokers Regulations, SEBI Circulars, and the Code of Conduct for stock brokers.
Full text
Page 2 of 20 registration of the stock broker for a period of five years. As the charges and resultant violations were extremely grave and serious in nature, SEBI was of the view that the recommended penalty was not commensurate with the violations committed by the stock broker and accordingly, issued a notice dated April 8, 2010 to the stock broker advising it to show cause as to why the recommended penalty should not be enhanced which may extend to the cancellation of its certificate of registration. The stock broker, vide electronic mail/letter dated May 3, 2010, though, requested SEBI to grant three weeks time to file the reply but, failed to adhere to the same. Thereafter, another opportunity was provided to the stock broker by SEBI to file the reply by June 17, 2010. It was also informed to the stock broker that in case of its failure to submit the reply within the time stipulated, SEBI would proceed in the matter on the basis of the documents available on record. In reply, the stock broker informed SEBI that, it would not be possible to file the reply before June 17, 2010. Thereafter, the stock broker, vide letter dated June 28, 2010 (received by SEBI on July 1, 2010) submitted its reply to the show cause notice dated April 8, 2010. Subsequently, an opportunity of hearing was also granted to the stock broker on July 15, 2010. However, vide letter dated July 13, 2010, the stock broker informed SEBI about its inability to appear on the said date and stated “ …. I have ma
Page 3 of 20 i. Clause A (4), Clause A(1) and C(6) of Code of Conduct for stock brokers as prescribed in Schedule II of Regulation 7, Clause 1(e) of Regulation 6A, Regulation 21(1) of the Securities and Exchange Board of India (Stock Brokers and Sub-brokers) Regulations, 1992 (hereinafter referred to as the Stock Brokers Regulations). ii. SEBI Circular No. SMD/POLICY/CIR-6/97 dated May 7, 1997, SEBI Circular No. SMD/SED/CIR/93/23321 dated November 18, 1993, SEBI Circular. No. SMDRP/Policy/CIR-39/2001 dated July 18, 2001, SEBI Circular: MRD/DoP/SE/Cir- 11/2008 dated April 17, 2008, SEBI Circular No. MIRSD/DPS-1/Cir-31/2004 August 26, 2004. iii. Section 12(1) of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as the SEBI Act). iv. Rule 8 (3)(f) of the Securities Contracts (Regulation) Rules, 1957.
Page 4 of 20 4. The Enquiry Officer had considered the replies of the stock broker and thereafter, submitted the Report with his findings and recommendation. As stated above, the stock broker has not specifically controverted the
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Source: SecMarx — sebi:WTM/KMA/MIRSD/322/12/2010. 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.