Sebi slaps Rs 16 lakh fine on Stock Holding Corp of India for flouting market rules, ET LegalWorld | Court Practice News


Market regulator Sebi has slapped a fine of Rs 16 lakh on Stock Holding Corporation of India Ltd for violating foreign portfolio investor rules. The decision came after Sebi had conducted an inspection of documents, and other records of SHCIL, a Designated Depository Participant (DDP), to verify the possible violations of the provisions of FPIs (Foreign Portfolio Investors) rules.

“I consider that the irregularities on the part of the SHCIL regarding non- maintenance of records and documents, registration of ineligible FPIs, discrepancies in the DDP manual, non-compliance w.r.t KYC form and demat form and fit and proper check, failure on its part to segregate activities and maintain necessary infrastructure and delay in forwarding audit report on internal controls does not absolve it from penalty.

“The irregularities on the part of the noticee (SHCIL) as brought out clearly shows that it has failed in its fiduciary duties owed to its clients,” Sebi’s Adjudicating Officer Santosh Kumar Sharma said in an order on Wednesday.

SHCIL is a subsidiary of IFCI Ltd, formerly known as Industrial Finance Corporation of India.

In a separate order, the regulator imposed a penalty of Rs 5 lakh on two individuals for violating regulatory norms in the matter of complaint by Finsec Law Advisors Ltd on behalf of Aequitas.

The fine has to be paid by the individuals jointly and severally.

In four separate orders, Sebi suspended the registration of four entities — Bhai Jee Commodities, Ratnakar Commodities, AUM Commodity Services and Milind Vijaybhai Thakkar — for their involvement in illegal paired contracts on the now defunct National Spot Exchange Ltd (NSEL).

  • Published On Nov 30, 2023 at 10:26 PM IST

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