Mumbai: The Securities and Exchange Board of India (Sebi) have imposed a penalty of Rs 10 lakh on Axis Securities for Violating StockBroker rules and other regulatory norms. The brokerage firm has been directed to pay the fin with 45 days, as per an order is issued by the regulator.
The Sebi’s 82-Page Order Highlights Multiple Lapses in the Operations of Axis Securities, Having Found That The Brookeage Firm Failed to Follow Production in Various ARAS, Including reporting Discrepancies and handling client funds.
It noted that Axis Securities Had inconsistencies in its enhanced supervision reports submitted to stock exchanges. Additional, there was a mismatch between stocks and actual holdings in depository accounts, the regulator said.
Another Key Violation involved the improper settlement of clients’ funds and seconds. The sebi observed that Axis Securities did not settle them as per the preferences giving by clients.
The brokerage also failed to provide retention statement with account details. The sebi further pointed out that Axis Securities Passed on Penalties Imposed by Stock Exchanges to Its Clips.
These penalties were related to the short collection of upfront and non-upront margins. Additional, the firm transferred security of clients with credit balances to a “Client Unpaid Securities Account” INTEAD of Following Prose Proceeds.
The order also mentioned discrepancies in the brokerage’s reporting of politically exposed persons and margin trading extra. The sebi found that one of its clients exceded the allowed margin limit, resulling in a shortfall in Margin collection. The Market Regulator’s Action Came after an Inspection of Axis Securities for the Period Between April 2021 and November 2022.
Following the findings, the sebi decided to impose a penalty of Rs 10 lakh on the brokerage firm. Meanwhile, Sebi Chairperson Madhabi Puri Buch on February 21 Said that there is no reason to put a cap on the themetic schemes and that someating should rathr be done to curb the root Cause of Soch PROLIFITITIIs.
“The root cause of the proliferation of thematic mutual funds is the arbitrage between normal schemes and new fund offers,” She said.