Markets regulator Securities and Exchange Board of India (SEBI) on December 30 levied a fine of Rs 5 lakh on India Advantage Securities Ltd for failing to settle accounts of both active and inactive clients. The order came after the regulator conducted an inspection between April 2016 and December 2017 to examine the running account settlement mechanism of India Advantage Securities.
Pursuant to the probe, it was found that the broker had violated SEBI's circular issued in December 2009.
As per the circular, the actual settlement of funds and securities shall be done by the broker, at least once in a calendar quarter or month, depending on the preference of the client.
However, the broker failed to do so.
"The default committed by the Noticee by failing to settle the accounts quarterly of both active and inactive clients, where some of the clients' accounts stood unsettled for more than one and a half year cannot be viewed leniently," SEBI said.
Consequently, SEBI imposed the monetary penalty on India Advantage Securities.
In a separate order, SEBI levied a fine of Rs 5 lakh on Satco Capital Markets Ltd for misusing the clients' funds on several instances.
The mis-utilisation of the clients' funds by Satco Capital is in the range of Rs 24.27 lakh on April 2, 2015 to Rs 11.95 crore on June 30, 2016, SEBI noted.
"The Noticee has misused the funds of its credit balance clients for its own purposes and also for its debit balance clients thereby violating the provisions of the Section 23D of the SCRA (Securities Contracts (Regulation) Act) read with SEBI circular no ... dated November 18, 1993," it added.
Besides, SEBI, through separate orders fined five entities--Shailibhadra Infosec Ltd, Sonal International Ltd, Gujarat Meditech Ltd, Gujarat Narmada Flyash Company Ltd and Hani Industries-- for failing to redress investor grievances pending in SCORES.
The fines have been levied in the range of Rs 1-3 lakh.
SCORES is a centralised web portal wherein unresolved grievances pertaining to securities market are registered.
Complaints received by SEBI in SCORES are electronically forwarded to the listed company which in turn is required to resolve the same and furnish the action taken report in electronic form.