Sebi imposes Rs 700000 fine on THIS company once owned by Anil Ambani, asks to pay amount within…
Sebi’s direction came after it inspected the firm from December 22, 2022, to January 24, 2023, to verify whether the entity compiled the stockbroking activities.
Sebi has imposed a penalty of Rs 7 lakh on Reliance Securities for non-compliance with the stock brokers’ norms. The market regulator has directed the firm to pay the fine within 45 months. Reliance Securities is the broking and distribution arm of Reliance Capital, once owned by Anil Ambani’s Reliance Group. Reliance Capital was recently acquired by IndusInd International Holdings (IIHL), a Hinduja Group firm.
Now, Sebi’s direction came after it inspected Reliance Securities, a registered stockbroker, from December 22, 2022, to January 24, 2023, to verify whether the entity compiled the stockbroking activities. In its probe, Sebi found that Reliance Securities reported incorrect details in daily margin statements sent to clients in three instances. Further, the ledger balance was wrongly reported in one instance. Additionally, the regulator noted that Reliance Securities did not comply with risk-based supervision (RBS) guidelines as data for cash collateral was not captured while reporting the RBS data.
“In RBS, Noticee (Reliance Securities) declared Rs 16.13 crore to the exchange for total funds available in the bank (all client bank accounts, including the settlement account)/ with clearing members (CM)/clearing corporations (CC) as on the last day of the assessment period. Whereas on verification, it was observed that Noticee has not included Funds available with CC / CM which amounts to Rs 312.57 crore,” Sebi noted.
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The regulator noted that the broking firm passed upfront penalties to a few clients in many instances. Under the rules, members shall not pass a penalty for short collection of upfront margin to clients under any circumstances. With regard to cyber security, Sebi noted adverse audit findings on cybersecurity audits for three periods. Reliance Securities failed to provide confirmation of product testing before use, did not designate an officer for cybersecurity, as required by Sebi.
(With inputs from PTI)
