The market regulator has fined stock broker Philip Capital India Pvt Ltd Rs 2 lakh for violations including submission of incorrect figures to the exchanges.
In an order dated June 25, the Securities and Exchange Board of India (Sebi) stated that the brokerage had submitted incorrect figures on client funds and collateral deposits to the exchange for the weekly enhanced supervision data and had wrong reporting of the non-funded portion of bank guarantees.
The regulator had conducted an inspection of the brokerage from November 21, 2022, to December 3, 2022, and the period covered under the investigation was from April 01, 2021 to October 31, 2022.
The Sebi order stated, "The enhanced supervision of stock brokers was inter alia introduced Monitoring of Clients’ Funds lying with the Stock Broker by the Stock Exchanges, through a sophisticated alerting and reconciliation mechanism, to detect any misutilisation of clients fund. For this purpose, the stock brokers were required to submit information periodically to the stock exchanges."
It added, "Although there is no allegation of misuse of clients’ funds, it is observed that there were certain instances of submission of incorrect data to the exchanges. The submission of incorrect data may cause the monitoring mechanism through enhanced supervision, to become ineffective."
With respect to the wrong reporting of non-funded portion of the bank guarantees (BGs), the brokerage had submitted that the collaterals provided to the MCX were not considered by the inspection team, due to which the BGs are not included in their calculations.
But the Sebi official noted that the brokerage had not submitted
any documents in support of its submissions.
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