Markets regulator Sebi today disposed of case against Punjab National Bank (PNB) regarding activities carried out by it as a registered depository participant. The ruling comes after Sebi conducted a probe in March 2016 and the period covered under inspection was from April 2014 to December 2015. It was alleged a discrepancy in the systems and procedures adopted by PNB, for handling instructions on behalf of the clients from POA (Power of Attorney) holders, as well as maintaining records of instructions received from beneficial owners.
The regulator had conducted an inspection of the books of accounts maintained by PNB in respect of activities carried out by it as a registered depository participant with a focus to verify whether the necessary documents are being maintained by it in the manner specified by the Securities Contracts (Regulation) Act and Depositories guidelines.
Further, the probe was also conducted to verify the extent of compliance with respect to provisions relating to pledge, DIS and transfer of securities and other matters. “The requirement… of the code of conduct for participants …of DP Regulations that a participant shall be prompt and diligent in execution of debit instruction slip on behalf of the beneficial owners remains fulfilled as the systems and procedures adopted by noticee (PNB) reflects substantial compliance on the part of the Noticee,” Sebi said in its order.
Further, the Sebi noted the depository NSDL which is conducting annual audit of the noticee from past 10 years, including the period prior to and post inspection, has not pointed out discrepancy in the systems and procedures adopted by PNB for handling instructions on behalf of the clients from POA (Power of Attorney) holders as well as with regard to maintaining records of instructions received from beneficial owners.
Accordingly, Sebi has concluded that violations as “alleged do not stand established and the case does not warrant imposition of any monetary penalty” and disposed of the matter.