[ By Bobby Anthony ]The Securities & Exchange Board Of India (SEBI) has slapped a fine of Rs 17 lakh on Motilal Oswal Financial Services Ltd for failing to comply with its circular which had asked stock brokers to segregate the funds and securities of their clients.The SEBI order has come after an inspection conducted by the market regulator which found that there were instances where...
The Securities & Exchange Board Of India (SEBI) has slapped a fine of Rs 17 lakh on Motilal Oswal Financial Services Ltd for failing to comply with its circular which had asked stock brokers to segregate the funds and securities of their clients.
The SEBI order has come after an inspection conducted by the market regulator which found that there were instances where the brokerage had misused its clients’ funds.
It was found to have utilized the credit balance lying in its clients’ bank account towards meeting its own or other clients’ obligations.
Clients’ funds were found to have been misused on 11 sample days out of the 20 sample days representing approximately 55% of sample dates selected by SEBI’s inspection team.
Around Rs 5.01 crore to Rs 102.06 crore worth of clients’ funds were found to be misused by the brokerage, which is a violation of provisions of the SEBI circular dated November 18, 1993, according to which brokerages ought to shall keep clients’ funds in separate accounts other than their own.
Also, no payment for transactions in which the member brokerage takes a position as a principal would be allowed to be made from the client’s account, as per the SEBI circular which was found to be violated by Motilal Oswal.