Capital markets regulator Sebi has imposed a Rs 2.5 million fine on Motilal Oswal Financial Services Ltd for misuse of client funds and incorrect reporting of margin.
In addition, he was charged for customer financing beyond the stipulated period, failure to maintain proper evidence of customer order placement, and deviations in the CKYC (Central Know Your Customer) process, among others. according to a Sebi order placed on Friday.
The order comes after the Securities and Exchange Board of India (Sebi) carried out a comprehensive inspection of Motilal Oswal Financial Services with respect to its stock brokerage and depositary business from August 2019 to September 2019.
The period covered by the inspection was from April 2018 to August 2019.
In its order, Sebi found that Motilal Oswal Financial Services had incorrectly declared margin to the exchange in the F&O segment if there was a shortfall in the case of three clients. Moreover, he had given exposure to few clients beyond T+2+5 days.
Moreover, the stockbroker had failed to upload clients’ CKYC details to the CERSAI (Central Registry of Securitization Asset Reconstruction and Security Interest of India) portal. Although it rectified the deficiencies after the inspection, there were instances of non-compliance during the inspection period which were not denied by Motilal Oswal Financial Services.
“As an intermediary registered with Sebi, the adviser was legally required to comply with the provisions of the SCRA & Sebi law, which he did not do. Such disregard for the provisions of the law governing the operation of these intermediaries calls for an appropriate sanction which should have a deterrent effect,” Sebi said.
By such acts, Motilal Oswal Financial Services violated regulatory standards and therefore Sebi imposed a fine.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)