sebi:WTM/VKC/MIRSD/6/09/06

SEBI · SEBI · 2003-09-22 · V.K. Chopra, 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

Minor penalty of suspension of registration for a period of 15 days imposed, effective on expiry of 21 days from date of order

Provisions invoked

• s. 19
• s. 12

Regulations

• Reg. 7
• Reg. 13(4)
• Reg. 13(2)
• Reg. 5
• Reg. 17
• Reg. 6(1)
• Reg. 17(1)(g)

Parties

• Sakshi Stocks and Shares Pvt. Ltd.

Holding

Sakshi Stocks and Shares Pvt. Ltd., member UPSE (INB100858538), was held guilty of multiple violations including acting as unregistered sub-broker and executing off-the-floor transactions, and a minor penalty of suspension of registration for 15 days was imposed.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ ORDER (UNDER REGULATION 13(4) OF SEBI (PROCEDURE FOR HOLDING ENQUIRY BY ENQUIRY OFFICER AND IMPOSING PENALTY) REGULATIONS, 2002)

securities, the Document register should contain the statement of account of the record relating to the receipts and delivery of securities pr by Depository Participants and   since the broker had dealt with dematerialized securities during the inspection period, the records had maintained as per the above regulation and the broker’s records were destroyed in fire on 15.04.2004 and a copy of the  statement provid Depository Participants was given as proof. I am of the opinion that the document register is the primary record for shares and securities h the broker on behalf of his client and for himself and also it is a statutory requirement. The broker is expected to maintain Document Regi keep a record of shares and securities held by it. The statement of Depository Participants does not absolve the broker from maintaini Document Register. However, I am inclined to take a lenient view since the records of the broker had stated to have been destroyed in t accident and he had produced the copies of statements provided by the Depository participants. 4.1.2       Non-routing of transactions through client Bank account: The EO found that the broker had not routed the transactions of the client through the client Bank account and found him guilty of violating Circular No.SMD/SED/CIR/093/23321 dated 18.11.1993 since the broker had admitted the same. The broker had replied that it had never m the clients fund in any manner and no specific charge had been made regarding the misuse of

collecting margins is in the interest of the broker so that he does not become liable to meet the payment obligations in the event of default client and he is expected to collect margins in the form of securities, money, FDRs, etc. Moreover, the broker had not delivered the securities clients in time. The letters of authority produced by the broker in support of his contention is not dated which raises doubt about the genuinen those letters. However, since there had been no complaint against the broker and no instances of defaulting to the Exchange, I am inclined a lenient view in this regard.

Source: SecMarx — sebi:WTM/VKC/MIRSD/6/09/06. 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.