sebi:WTM/TCN/MIRSD/61/11/06

SEBI · SEBI · 1997-05-21 · Dr. T.C. Nair, Whole Time Member

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Censure imposed on the sub-broker

Regulations

• Reg. 13(4)
• Reg. 13(2)
• Reg. 200

Parties

• M/s Kattikaran & Co., Sub-Broker, SEBI Registration No. INS 231013512

Holding

The Whole Time Member censured M/s Kattikaran & Co., a sub-broker, for violations including dealing without valid registration, failure to maintain confirmation memos and proper daily statements, failure to furnish auditors' certificates, and failure to maintain client registration forms. The EO's recommended penalty of twenty days' suspension was reduced to a minor penalty of censure.

Full text

Dec 04, 2006 | Orders : Orders of Chairman/Members SECURITIES AND EXCHANGE BOARD OF INDIA  CORAM: DR.T.C.NAIR, WHOLE TIME MEMBER IN THE MATTER OF M/S KATTIKARAN & CO., SUB-BROKER, SEBI REGISTRATION NO. INS 231013512  AFFILIATED TO M/S. COCHIN STOCK BROKERS LTD., MEMBER, NATIONAL STOCK EXCHANGE

4.4 The EO found that the sub-broker had not maintained confirmation memos and that the daily statements of transactions were not issued in the prescribed format of sale/purch and even basic details such as name of the broker to whom the sub-broker was affiliated and the SEBI Registration Number were not provided in them. The sub-brok admitting that certain requirements were not incorporated in the database, stated that all the clients were issued statement of the day’s transactions on the very same day. found that the sub-broker had violated SEBI Circular No. SMD/Policy/Cir-11/97 dated 21.05.1997 and also Clause B(6) of the Code of Conduct as specified in the Sched SEBI (Stock Sub-sub-brokers and Sub-Sub-sub-brokers) Regulations, 1992.  I note that maintenance of requisite details in proper format helps in audit trail in the event o and the sub-broker is required to adhere strictly to the statutory requirements. I, therefore agree with the findings of the EO that the sub-broker is guilty of the violations cited 4.5 As regards the charge of not furnishing the Auditors’ Certificate on a quarterly basis to CSBL, the sub-broker failed to submit any documentary evidence and hence the EO found In the absence of an explanation by the sub-broker, I agree with the findings of the EO. 4.6 The EO found that the sub-broker had failed to maintain client registration forms for the clients, some of whom were active and of high value, in terms of their turnover wh violation of SEBI Circular

sub-broker through the NSE. The sub-broker submitted its reply vide letter dated nil, pleading ignorance and requested the EO to take a lenient view of the violations committed by him. He further requested for a personal hearing before the EO. 2.3 An opportunity of personal hearing was granted to the sub-broker on January 7,

Source: SecMarx — sebi:WTM/TCN/MIRSD/61/11/06. 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.