Angel One share price tanked 7% to Rs 1,585 today after the National Stock Exchange of India (NSE) barred the brokerage firm from onboarding new Authorised Persons (APs) for a period of six months. The ban on Angel One was pronounced in an order dated July 14, by the Member and Core Settlement Guarantee Fund Committee of the NSE. The order comes after the broking firm’s alleged failure to monitor the operations of its APs, thereby resulting in an alleged violation of the Capital Market Segment Regulations and Futures and Options Segment Regulations of the Exchange.
The exchange has also slapped the brokerage house’s monetary penalty of Rs 1.67 crore. NSE has further directed Angel One to conduct an inspection of all its APs and submit a report within six months. However, the brokerage firm said the order does not affect the existing business or the activities of the APs affiliated with the company. “The Company is evaluating various options available including filing an appeal against the Order. The Company has always strived to and carried out its business in compliance with extant laws and regulations in letter and spirit,” Angel One said.
The APs are the market intermediaries acting as the contact point between the investors and the stock brokers. APs account for 21% of Angel One’s net broking revenue and contribute around 25% to new customer acquisitions. Since Q2FY21, Angel One has cancelled licences for 270 APs, with 83 in Q1FY24. In the Q1FY24 management call, the company underlined its strategy to boost focus on the AP network for scaling the business.