In a stern move, market regulator SEBI has slapped a Rs 7 lakh penalty on Motilal Oswal Financial Services Ltd (MOFSL) for multiple violations of stockbroking norms. The infractions range from incorrect margin reporting and misreporting client funds and securities to non-compliance with stockbroker and depository participant regulations.
Breaking down the penalties:
Rs 1 lakh for failure to maintain proper books and records
Rs 1 lakh for not addressing investor grievances
Rs 5 lakh for general non-compliance
Motilal Oswal has been given 45 days to clear the fine. However, SEBI noted in its order that no material evidence suggests any disproportionate gains or unfair advantage from these violations.
This came after Sebi conducted inspection of the stock broker and depository participant, MotilalOswal Financial Services Ltd, jointly with stock exchanges and depositories for the inspection period from April 2021 to June 2022.
Also ReadJefferies maintains Buy on Bajaj Finance. 3 reasons why…
In its probe, the regulator found that Motilal Oswal Financial Services did not resolve 26 complaints within a period of 30 days, transferred securities of credit balance clients to “client unpaid securities account”, and incorrectly reported Margin Trading Funding (MTF) collaterals to the exchange.
Additionally, it had done wrong reporting and short collection of margin on one instance in CM (capital market) segment, on one instance in FO (futures & options) segment and on five instances in currency derivative segment.
The regulator noted that 39 clients had traded in June 2022 but these clients were considered as inactive by the broker and their funds were parked aside as on June 2022.
Also ReadNearly $10 billion wiped out in President Donald Trump’s meme coin crash
“I find that the allegation that the Noticee (Motilal Oswal Financial Services) while setting aside funds of Rs 3.50 crore belonging to 39 active clients, has shown incorrect reasons viz. non-availability of client’s bank account and non-traceability of client, stands established,” Sebi Adjudicating Officer Amar Navlani said.
The regulator said the “Noticee being a Sebi-registered stock broker and depository participant was required to comply with the applicable provisions of securities laws, which it had failed to comply with… Such failure and non-compliances accordingly needs to be dealt with suitable penalty”.
Accordingly,
» Read More
