sebi:WTM/MSS/IVD/156/08
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Facts / Headnote
Certificate of registration of Khandwala Finstock Pvt Ltd suspended by 7 days, effective on expiry of 21 days from date of order
Provisions invoked
- s. 19
- s. 12(1)
- s. 13
Regulations
- Reg. 7
- Reg. 4
- Reg. 28
- Reg. 200
Parties
- Khandwala Finstock Pvt. Ltd.
Holding
KFPL was found to have traded as an unregistered sub-broker on BSE in violation of section 12(1) of the SEBI Act, 1992 and to have failed to exercise due care and diligence under the Code of Conduct, and its certificate of registration was suspended for 7 days. The allegation of manipulation under regulation 4(a) and (b) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995 was not established.
Full text
Page 2 of 4 recommended by the Enquiry Officer, should not be taken against it. KFPL, vide letter March 3, 2008, replied to the show cause notice. An opportunity of personal hearing was granted to KFPL before me on September 30, 2008. Mr. Vimal P. Khandwala, Director of KFPL, along with its advocates, appeared before me and made submissions. KFPL, vide letter dated October 3, 2008, has filed further written submissions.
Page 3 of 4 4. The facts in Para 3 have not been disputed by the KFPL. It has, however, made two main submissions: a. KFPL traded in the shares of GCCL only upon and as per the instructions of the clients and in such circumstances cannot be held liable for the acts of the clients; and b. KFPL was not required to be registered as a sub-broker of AFPL with SEBI since it was already registered as broker of ASE with SEBI.
Page 4 of 4 8. KFPL has made two incidental arguments. First, it has not been provided with full investigation report. I find that entire enquiry report has been provided to the KFPL and the charges are not based on any document which has not been provided. Second, the proceedings have been unduly delayed. I find that the KFPL has partially contributed to the delay. In any case, there is no time limit on disposal of a proceeding of this nature nor the delay can justify exoneration.
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Source: SecMarx — sebi:WTM/MSS/IVD/156/08. 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.