Business Daily from THE HINDU group of publications
Tuesday, Dec 12, 2006
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Business Daily from THE HINDU group of publications Tuesday, Dec 12, 2006 ePaper |
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Regulatory Bodies & Rulings Markets - Economic Offences Our Bureau
The broking firm will file an appeal before the Securities Appellate Tribunal, challenging the order, and would also seek a stay on the SEBI directed suspension.
Kolkata , Dec. 11 The Securities and Exchange Board of India has suspended Reliance Share and Stock Broking (RSSB), a member of the BSE, the NSE, the CSE and a few other regional bourses, for four months for violations of brokers' regulations. Incidentally, the alleged violations had taken place before April of 1999. During the "relevant period", it was a wholly owned subsidiary of Reliance Capital, the order mentioned. Now, the broking firm is part of the Anil Dhirubhai Ambani group. The order, issued on Monday under regulation 13 (4) of SEBI (Stock Brokers and Sub-brokers) Regulations, 1992, by Mr T.C. Nair, the Whole Time Member of SEBI, said the suspension of certificate of registration of RSSB would take effect within the next 21 days. This leaves ample room for an appeal against the directive. A spokesperson of the broking firm told Business Line that it would file an appeal before the Securities Appellate Tribunal (SAT), challenging the order, and would also seek a stay on the SEBI directed suspension.
The charges
The SEBI order said that the stock broking firm was found guilty of "some serious violations such as artificial pricing of trades, omission in mentioning relevant entries in contract notes, conversion of own trades to client trades, omission in mentioning of client ID for execution of trades, consolidation of client orders, (and) unfair trade practices in violation of Regulation of 6 (b) of PFUTP Regulations". The order follows the last hearing on April 7, 2006. The SEBI enquiry officer, in his report submitted on November 18, 2003, found violations on 13 counts and had recommended "a major penalty of suspension of certificate of registration of the stock broker for a period of nine months," today's order pointed out. The broking company's spokesperson also stated that the SEBI order "relates to alleged procedural defects in the period 1999-2000, more than six years old, when RSSB was part of the combined old Reliance group. RSSB now has an insignificant volume of business transactions, and there are no plans to expand".
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