New Delhi: Capital markets regulator SEBI on Friday imposed a fine of Rs 9 lakh on Reliance Securities for violating market norms as well as stock brokers rules. The order comes after a subjective onsite examination of the accounts, records and other documents of authorized persons of SEBI-registered stock broker Reliance Securities Limited (RSL) by the regulator and stock exchanges, NSE and BSE. This inspection was conducted to ascertain whether the provisions of the Stock Broker Rules, NSEIL Capital Market Regulations and NSE Futures & Options Trading Norms are being maintained in the manner required by the RSL.
This inspection was conducted for the period from April, 2022 to December, 2023. As per the findings of the inspection, the Securities and Exchange Board of India (SEBI) issued a 'show cause notice' to RSL on August 23, 2024. SEBI, in a 47-page order, found multiple violations committed by RSL and its authorized persons. These include not maintaining adequate mechanisms to record client order placement, irregularities in terminal locations and lack of isolation in offices shared with other brokers.
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SEBI ordered transparency
The inspection also found that RSL failed to maintain required order placement records for offline customers linked to its authorized persons – Jitendra Kambad and Naitik Shah. SEBI has ordered brokers to maintain verifiable evidence of customer orders to ensure transparency and prevent unauthorized trades.
RSL accepted the violations
As per the order, the market regulator has mandated brokers to maintain verifiable evidence of customer orders. Although RSL acknowledged the violations, it said it took corrective measures, including disabling terminals operated by unapproved users. Furthermore, the market regulator has flagged unauthorized personnel operating these terminals. Inspection also revealed inadequate segregation in the offices of authorized persons of RSL.
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