sebi:WTMN/24/MIRSD/6/04
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Facts / Headnote
Certificate of registration bearing No. INB 200893532 cancelled
Provisions invoked
- s. 19
- s. 24
Regulations
- Reg. 13
- Reg. 16
- Reg. 27
- Reg. 13(1)
- Reg. 15(c)
- Reg. 13(6)
- Reg. 25
- Reg. 16(5)
Parties
- Arushi Security & Cap. Ser. Pvt. Ltd.
Holding
The certificate of registration of Arushi Security & Cap. Ser. Pvt. Ltd. as a stock broker was cancelled on the ground that it ceased to be a member of a recognized stock exchange (OTCEI) with effect from 22.12.03, thereby violating a condition of registration.
Full text
Page 2 of 5 to the said broker, as the said broker ceased to be a member a recognized stock exchange. 2.4 I note that adequate opportunity had been given to the said broker in terms of Regulation 16 of the Enquiry Regulations and that it has chosen not to avail such opportunity. Therefore, I am satisfied that the requirements of natural justice have been fulfilled and I proceed further in the matter. 3.0 I have considered the facts of the matter, report of the Enquiry Officer and other material on record. The following issue arises for consideration: 3.1 Whether, the said broker has violated the conditions of registration. 3.1.1 I note that OTCEI vide its letter dated 26.12.03 informed SEBI that they have expelled the said broker w.e.f. 22.12.03 and that it has ceased to be the member of the Exchange with effect from 22.12.03. 3.1.2 I note that no reply or communication was received from the said broker. 3.1.3 I note that Rule 4 of the SEBI (Stock brokers and sub brokers) Rules, 1992 (hereinafter referred to as “the broker regulations”) states that : “Conditions for grant of certificate to stock broker
Page 3 of 5 4. The Board may grant a certificate to a stock broker subject to the following conditions, namely :- (a) he holds the membership of any stock exchange; (b) … (c) … (d) … (e) … ” 3.1.4 I note that the Enquiry Officer in his report has found that the said broker ceased to be a member of OTCEI w.e.f. 22.12.03, hence its certificate is liable to be cancelled. 3.1.5 In view of the above, I agree with the findings of the Enquiry Officer and find that the said broker has violated one of the conditions subject to which registration has been granted to him viz. that it shall be a member of a recognized stock exchange. 3.2 I note that Regulation 25 of the broker regulations provides that : “Liability for contravention of the Act, rules or the regulations.
Page 4 of 5 (ii) Penalties as specified under Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and Imposing
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Source: SecMarx — sebi:WTMN/24/MIRSD/6/04. 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.