SEBI Imposes Rs 3-Lakh Penalty On Motilal Oswal Financial Services
During an inspection of terminal verification at NSE, it was noted that four terminals were operated by individuals who were not the approved users assigned to them.
Markets watchdog SEBI on Monday imposed a Rs 3 lakh penalty on Motilal Oswal Financial Services Ltd. for allegedly breaching stockbrokers' norms.
According to SEBI's order, the fine must be paid within 45 days. The regulator carried out a thematic inspection of the company from April 2022 to January 2024, focusing on 'Control over Authorized Persons.'
The investigation revealed that trading terminals were not placed at designated authorized places.
"During inspection, 13 terminals were not found at the reported location. Further, on verification of trade data as on 04-03-2024, it was observed that trades have been executed from 5 out of 13 terminals, 9 terminals were not found at the reported location, and trades have been executed from 1 terminal," SEBI said.
During an inspection of terminal verification at NSE, it was noted that four terminals were operated by individuals who were not the approved users assigned to them. Also, at BSE, four trading terminals were used by unauthorized users.
According to regulations, a stockbroker's hall may face monetary penalties for allowing trading terminals to be accessed by unapproved individuals or used in unauthorized locations.
Also, SEBI noted that Motilal Oswal Financial Services had conducted the onsite inspection of two APs (Authorised Persons) and had submitted the inspection report to BSE and NSE. However, it failed to identify fund-based activities during AP inspection and did not report fund-based activities between AP and the client to NSE in the MIS (Margin Intraday Square off) report.
Motilal Oswal Financial Services' AP -- Triventure Services -- had fund-based relationships with 36 registered clients, wherein 18.31 crore have been received and payments amounting to Rs 1.24 crore have been made. In case of another AP -- Merit Capital Market Services, 99 clients' transactions were observed out of total transactions with 228 entities, amounting to Rs 5.69 crore payment to clients and Rs 5.06 crore received from clients.
"Both the APs had a fund-based relationship with the clients. Thus notice (Motilal Oswal Financial Services) did not ensure that its APs are engaged only in permitted activities and are not undertaking any business which are disallowed under the Byelaws, Rules & Regulations and circulars of SEBI/exchanges," SEBI said in its order.
Through such activities, Motilal Oswal Financial Services violated stockbrokers' rules and accordingly imposed a penalty of Rs 3 lakh for the violations.
(With PTI Inputs)
