Synopsis
On February 22, SEBI fined Axis Securities Rs 10 lakh for breaching stockbroker regulations. The firm is instructed to pay the penalty within 45 days, following an 82-page order that outlines various operational lapses. SEBI's investigation revealed issues related to client fund management, reporting discrepancies, and improper settlements.Key Takeaways
- SEBI imposes Rs 10 lakh fine on Axis Securities.
- Deadline for fine payment is 45 days.
- Numerous regulatory violations found during inspection.
- Inconsistencies in client fund handling reported.
- SEBI's Chairperson comments on thematic schemes proliferation.
Mumbai, Feb 22 (NationPress) The Securities and Exchange Board of India (SEBI) has levied a fine of Rs 10 lakh against Axis Securities due to violations of stockbroker regulations and other compliance requirements.
The brokerage is required to remit the penalty within 45 days, as stated in the regulator's order.
The comprehensive 82-page order from SEBI details numerous deficiencies in the operations of Axis Securities, revealing that the firm did not adhere to appropriate protocols in various aspects, including the reporting of discrepancies and the management of client funds.
It was highlighted that Axis Securities exhibited inconsistencies in the enhanced supervision reports submitted to stock exchanges.
Furthermore, the regulator noted discrepancies between stock statements and actual holdings in depository accounts.
Another significant infraction involved the inadequate settlement of clients' funds and securities, with SEBI finding that Axis Securities did not process them according to clients' specified preferences.
The brokerage also neglected to provide retention statements with account information.
Moreover, the SEBI emphasized that Axis Securities transferred penalties imposed by stock exchanges onto its clients.
These penalties were tied to the short collection of both upfront and non-upfront margins.
Additionally, the firm improperly transferred clients' securities with credit balances to a client unpaid securities account, failing to follow established procedures.
The order also pointed out inconsistencies in the brokerage's reporting regarding politically exposed persons and margin trading exposure.
SEBI discovered that one client surpassed the permissible margin limit, resulting in a margin collection shortfall.
This regulatory action followed an inspection of Axis Securities covering the period from April 2021 to November 2022.
Consequent to these findings, SEBI resolved to impose a penalty of Rs 10 lakh on the brokerage.
In related news, SEBI Chairperson Madhabi Puri Buch stated on February 21 that there is no justification for imposing a cap on thematic schemes and suggested that measures should instead focus on addressing the underlying issues contributing to their proliferation.
“The root cause of the proliferation of thematic mutual fund schemes is the arbitrage between normal schemes and new fund offers,” she remarked.
