Kfin Technologies Pays Rs 88 Lakh To Settle RTA Rule Violation Case With SEBI

KFin Technologies on Tuesday paid Rs 87.7 lakh to markets regulator Securities And Exchange Board of India to settle a case related to alleged flouting of regulatory norms.

The development came after KFin Technologies filed a settlement application in August 2024, requesting the regulator to settle the adjudication proceedings.

As per the settlement order, the markets watchdog will not initiate enforcement proceedings against KFin Technologies for the violations.

However, Securities And Exchange Board of India retains the right to take further action if any misrepresentation is discovered or if the company breaches any terms of the settlement.

"The instant adjudication proceedings initiated against the applicant (KFin Technologies) vide SCN (show cause notice) dated July 8, 2024, are disposed of," SEBI's Adjudicating Officer Jai Sebastian said in the settlement order.

The order came after SEBI had undertaken an inspection of KFin Technologies for the period Feb. 1 to Nov. 30, 2023. Thereafter, findings of the inspection were communicated to the applicant by the market watchdog.

Sebi found that KFin Technologies has failed to exercise due diligence while processing the request for dematerialisation of shares. Therefore, it was alleged that the applicant had violated the provisions of the RTA (Registrars to an Issue and Share Transfer Agents) rules.

The regulator also observed that KFin had allegedly failed to mark folios not having PAN details (17.98 lakh folios) or bank account details (17.75 lakh folios) for enhanced due diligence. Therefore, the applicant had violated the SEBI norms.

Thereafter, the regulator issued an SCN on July 8, 2024, to the applicant.

Following the application, KFin Technologies filed revised settlement terms, paid Rs 87.75 lakh, and settled the matter.