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New Delhi, 10 October (Hindustan Reporter). Market regulator Securities and Exchange Board of India (SEBI) has imposed a fine of Rs 2 lakh on brokerage firm Choice Equity Broking for not following the prescribed rules. According to SEBI order, Choice Equity Broking did not provide correct information about clients related to Authorized Persons (AP) to the exchange. It has been reported that in three cases, funds were transacted for AP services between the authorized person of the brokerage and the client. During this period, AP terminals were used by unauthorized people.
Giving information about the results of the investigation in the SEBI order, it has been said that one of the authorized persons of the brokerage firm did not provide information of 226 clients to the exchange, while the other did not provide information of 118 clients and the third did not provide information of 7 clients to the exchange. Got it done. SEBI's investigation also revealed that one of the authorized persons of the brokerage firm, Grow Capital Finance Services, was transferring funds to its clients. However, the brokerage firm clarified that this work of fund transfer was done by the authorized person in his personal capacity with the client, for which the brokerage firm should not be held responsible.
It is noteworthy that under SEBI rules, Authorized Persons are barred from accepting any payment or delivery of client funds and securities. This rule states that the Authorized Person shall not collect any funds or securities from the client and shall not take any payment or sum, directly or indirectly, from the client for the services rendered by the member as an agent. In its investigation, SEBI has taken punitive action and imposed a fine on Choice Equity Broking due to violation of this rule.