Sebi cancels registration of 4 stock brokers, 11 depository participants

The main purpose of cancellation of certificate of registration, as depository participant or stock broker of the entities, is to prevent the misuse of it

Markets regulator Sebi on Monday cancelled the registration of four stock brokers and 11 depository participants, including Karvy Stock Broking and Anugrah Stock & Broking.

Irrespective of the cancellation of the registration certificate, the respective entities will continue to be liable for anything done as depository participants or stock broker and will continue to be responsible for payment of outstanding fees and dues and interest if any, due to Sebi.

The directions will come into force with immediate effect, the Securities and Exchange Board of India (Sebi) said in two separate orders.

Sebi said the registration of four stock brokers -- KSBL Securities, Conard Securities, Anee Securities and Credential Stock Brokers -- have been cancelled upon expulsion from the stock exchanges.

Also Read | What are the Sebi rules on sharing trading information?

The exchanges have informed Sebi that brokers were expelled from their membership by them and the same has been communicated to them, the order mentioned.

The four entities have ceased to satisfy the conditions of registration stipulated under broker regulation, Sebi said.

Apart from Karvy Stock Broking and Anugrah Stock & Broking, the entities whose registration has been cancelled as depository participants are -- Wellindia Securities, BRH Wealth Kreators, Fairwealth Securities, Vrise Securities, MK Chandan Broking (RTG Share Broking), KSBL Securities, Vineet Securities, Anee Securities, Sumpoorna Portfolio.

The registration of depository participants was cancelled after depositories informed Sebi that the agreements between the depositories and 11 entities were terminated by them and the same has been communicated to them.

"Therefore, I note that the noticees are no longer participants of any depositories. Thus, the noticees have ceased to satisfy the conditions of registration stipulated in the... DP Regulations, 2018," Sebi Whole-Time Member Ananta Barua said.

The main purpose of cancellation of certificate of registration, as depository participant or stock broker of the entities, is to prevent the misuse of their certificate of registration with Sebi on unaware investors.

It further said the entities will continue to be liable for any action initiated or to be initiated as if their certificate of registration has not been cancelled and this order does not absolve them from any violation of the securities laws committed by the noticees as registered depository participants/stock brokers.

"The noticees shall ensure to arrange for maintenance and preservation of records and other documents required to be maintained under the relevant regulations; redressal of investor grievances; transfer of records, funds or securities of its clients; continuity of service to its clients; and necessary actions with respect to the defaults or pending action, if any," Sebi said.

Through a separate, Sebi has imposed a penalty of Rs 2 lakh on Bhushan Steel Ltd (presently known as Tata Steel BSL Ltd) for disclosure lapses.

Bhushan Steel did not make requisite disclosures as stipulated under the LODR (Listing Obligations and Disclosure Requirements) norms, Sebi noted.

In 2018, Tata Steel acquired Bhushan Steel through the insolvency resolution process.

Separately, the regulator has levied a fine of Rs 6 lakh on Jyoti Structures Ltd for flouting LODR rules.

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