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IIFL Securities to Approach SAT Against SEBI Order Imposing Bar on Signing New Broking Clients
IIFL Securities to Approach SAT Against SEBI Order Imposing Bar on Signing New Broking Clients In a response to the Securities and Exchange Board of India’s (SEBI) order, IIFL Securities is set to prefer an appeal before the Securities Appellate Tribunal (SAT) against market regulator order that banned the broking house from onboarding new clients for two years. IIFL Securities,...
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IIFL Securities to Approach SAT Against SEBI Order Imposing Bar on Signing New Broking Clients
In a response to the Securities and Exchange Board of India’s (SEBI) order, IIFL Securities is set to prefer an appeal before the Securities Appellate Tribunal (SAT) against market regulator order that banned the broking house from onboarding new clients for two years.
IIFL Securities, earlier known as India Infoline Ltd in a regulatory statement added, that the order does not affect the company's existing business with the existing clients.
The statement comes after the market regulator barred the brokerage from onboarding new clients for two years, for mixing clients' funds with proprietary funds, for using credit-balance client accounts to settle obligations of debit-balance client accounts, and for using credit-balance client accounts to settle proprietary-trade obligations.
In its order, SEBI found that IIFL had misused the funds of its credit balance clients for settlement of its proprietary trades as well as the trades of its debit balance clients from April 2011 to June 2014, and the said violations were again noticed during March 2017 inspection for the period of financial year 2015-16 and 2016-17.
“IIFL had acted in complete disregard of the legitimate interests of its credit balance clients and has not only benefitted itself but also provided benefits to its debit balance clients at the cost of its credit balance clients by using funds of credit balance clients to settle its own proprietary trades as well as the trades of its debit balance clients to the tune of hundreds of crores of rupees,” SEBI stated.
The order came after the market watchdog conducted multiple inspections of the books of account of IIFL for the period April 2011 to January 2017.
The Company while defending itself against the allegations levied by SEBI stated that, it has always met all its obligations towards exchanges and clients on time and has always followed a ‘compliance first approach and carried out business in full compliance in letter and spirit with extant laws and regulations.’