After NSE, BSE declares Karvy Stock Broking as defaulter, expels from membership

By: |
November 25, 2020 4:22 PM

In November 2019, the regulator barred Karvy from taking new brokerage clients after it was found that the brokerage firm had allegedly misused clients' securities to the tune of more than Rs 2,000 crore.

Share Market Today, Share Market LiveBroader markets outperformed the benchmark indices.

Leading bourse BSE has also declared Karvy Stock Broking as a defaulter and expelled the brokerage house from its membership after a similar action was taken by the National Stock Exchange (NSE).

Investors having any outstanding claims against the brokerage can file their claims with the exchange within 90 days from the date of issue of the notice — by February 22, 2021 –, the BSE said in a circular on Tuesday.

“The exchange has declared Karvy Stock Broking Ltd, a corporate trading member of the exchange as defaulter… and also expelled the said trading member… with effect from November 24,” the BSE said.

The NSE has also declared the brokerage house as a defaulter and expelled from its membership with effect from November 23.

Karvy had unauthorisedly transferred securities of clients into its demat accounts by misusing PoAs (Power of Attorney) given by its clients. The firm had misused client collateral for its own trades.

On Tuesday, Sebi confirmed the ban on Karvy from taking new clients. The regulator passed the final order, a year after passing an interim order wherein the ban on Karvy was imposed for misusing clients’ securities.

The final order comes after the regulator received a forensic audit from the NSE in the matter.

In November 2019, the regulator barred Karvy from taking new brokerage clients after it was found that the brokerage firm had allegedly misused clients’ securities to the tune of more than Rs 2,000 crore.

On November 17, the NSE said funds and securities worth Rs 2,300 crore belonging to about 2.35 lakh investors of Karvy had been settled so far.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Early birds: IT firms take the lead in strong Q3 show
2Equity Strategy: Broad-based upgrade in earnings likely
3Karnataka Bank Rating: buy- CoD fall, lower credit costs aided earnings