Based on the findings of the inspection, the regulator found certain alleged non-compliances of Stock Brokers regulations and circulars issued by Sebi, NSE and BSE.
In its order, the regulator observed that in 55 instances, there was a short collection of margin/ MTM amounting to Rs 33.16 lakh.
However, Anand Rathi submitted that there was no margin shortfall, and they are adequately collecting margins from the clients and adhering to the regulatory guidelines.
Further, no supporting documents are submitted by the brokerage firm, therefore, the contention of the noticee is not tenable.
Accordingly, Anand Rathi Share and Stock Broker contravened the stock broker rules, the regulator said. During an inspection on verification of margin collection and reporting, it was observed that the noticee has passed a penalty for a short collection of upfront margins from clients. However, no supporting documents were provided by Anand Rathi, thereby violating the Code of Conduct of Stock Brokers regulations.
The markets watchdog also identified that a total number of 10 technical glitches occurred between April 2022 and October 2023, which were not reported to the Multi Commodity Exchange (MCX) by the brokerage house.
As per stock brokers’ rules, brokers will have to inform about the technical glitch to the stock exchanges immediately but not later than 1 hour from the time of occurrence of the disruption.
Anand Rathi was under a statutory obligation to abide by and comply with the provisions of the circulars/directions issued by Sebi and stock exchanges, which it failed to do during the inspection period, the regulator added.
In a separate order, the regulator slapped a penalty of Rs 2 lakh on brokerage house Nirmal Bang Securities for violating stock brokers’ regulations.
The order came after the markets watchdog conducted an inspection in respect of Nirmal Bang Securities Pvt Ltd, a Sebi-registered stock broker.
The thematic inspection of books of account and other documents of Nirmal Bang Securities in the matter of verification of authorised persons was conducted by Sebi officials for the period from April 2022 to May 2023.
