The Securities and Exchange Board of India (SEBI) has found compliance lapses at Angel One Limited, one of the largest retail brokerages, following a thematic inspection of its authorised persons (APs). The market regulator has alleged that the broker failed to prevent unauthorised access to trading terminals, did not update key financial details of an AP, and lacked adequate supervision of its network.
In its order SEBI said the inspection, conducted jointly with the NSE was focused on APs using multiple terminals for proprietary trading. The on-site inspection was carried out on July 30, 2024, at the premises of authorised person (AP) Ashwin Thakkar, covering the period from January 1 to June 30, 2024.
According to SEBI, six unauthorised users operated trading terminals mapped to Thakkar, in violation of exchange circulars issued between 2002 and 2023. Further, four terminals were allegedly operated from locations not disclosed to the exchange, breaching reporting norms under the SEBI (Stock Brokers) Regulations. SEBI order noted that, “Four trading terminals mapped to AP – Ashwin Thakkar were not operated from the locations reported to stock exchange.”
In inspection report SEBI alleged Angel One had failed to promptly update the revised income and net worth details of its AP in the unique client code (UCC) database. But later it was found that the revised net-worth of the AP was correctly updated in the BSE portal an the entry in the NSE portal was an inadvertent error, which was promptly rectified.
In inspection SEBI pointed that Thakkar was also an active client of four other brokers, a conflict that Angel One should have identified and addressed under exchange guidelines. But in adjudication order these charges were dropped. Adjudication order noted that, Angel One failed to identify that its AP was dealing with other stock brokers is not established.
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In addition, two other APs of the broker Vipul Sanghvi and Kartik Tanna, were found to have access to trading terminals mapped to Thakkar, suggesting inter-AP dealing within the same brokerage, which is expressly disallowed.
Later, Angel One took corrective steps upon being made aware of the operation of terminals from the location other than reported to exchange and submitted a terminal disablement request to NSE on August 01, 2024. Additionally, requested for cancellation of AP registrations of Vipul R. Sanghavi and Kartik Madhavji Tanna.
SEBI observed a significant gap between Angel One’s internal audits and regulatory findings. While the broker’s own audit of the three APs had not reported any irregularities, SEBI’s inspection uncovered several violations, indicating weak supervisory mechanisms and inadequate internal controls. SEBI imposed a penalty of Rs 3 lakh on Angel One for these violations.
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