Markets regulator Sebi Tuesday fined brokerage house Anand Rathi Rs 1 lakh for violating stock broker norms by transferring funds from the client’s account to own account and vice versa on several occasions. In an order, the regulator said that Anand Rathi Shares and Stock Brokers has mixed-up client’s funds with its own funds and vice versa and thereby acted in contravention of Sebi (Stock Brokers and Sub-Brokers) Regulations.
The regulator had outlined strict segregation of client’s funds, member account’s funds and transfer of funds is permitted as an exception under specific instances. However, the scheme of arrangement regarding transfer of money made by the Anand Rathi is not in accordance with the permissible conditions under the stock brokers norms which makes it liable for monetary penalty, Sebi noted.
Accordingly, the Securities and Exchange Board of India (Sebi) imposed a fine on the firm. In a separate order, Sebi has levied a total penalty of Rs 5 lakh on four persons for failing to make disclosure about change in their shareholding in SMS Techsoft Ltd within the required timeline.
The persons facing penalties are Kirtikumar Rasiklal Shah, Alkaben Kirtibhai Shah, Karan Kirtibhai Shah and Kewal Kirtikumar Shah. According to Sebi, these four persons, who were acting in concert, collectively acquired over 39 lakh shares of the company, which resulted in cumulative change in their shareholding.
However, they failed to mandatory disclosure about this as required under SAST (Substantial Acquisition of Shares & Takeovers) Regulations to the company and BSE.