SEBI Case Law 29.11.2024 RELIANCE SECURITIES LIMITED

Facts of the Case: SEBI and exchanges viz, National Stock Exchange (“NSE”) and Bombay Stock Exchange(“BSE”) had conducted a thematic onsite inspection of the books of accounts, records and other documents of Authorized Persons (APs) of Reliance Securities Limited (“Noticee/ RSL”), registered with SEBI as a Stock Broker since September 09, 2005. The inspection was conducted for the period beginning from April 01, 2022 to December 31, 2023.

The inspection findings were communicated to the Noticee and after examining the reply submitted by the Noticee, it had been alleged that the Noticee contravened provisions of the SEBI Act, 1992, SEBI (Stock Brokers) Regulations, 1992 and applicable Circulars issued thereunder, in respect of the activities carried out by it. The summary of the violations alleged to have been committed by Reliance Securities Limited are given below:-

Alleged Violations (Summarized)
1. Non-maintenance of adequate systems for recording of order placement by clients.
2. Discrepancy w.r.t existence of terminal at inspection location Vis a Vis information reported to exchange by the Noticee.
3. No proper segregation and demarcation maintained at the AP office.
4. Failure of the Noticee in ensuring that its Authorized Persons are engaged only in permitted activities. 5. Failure of the Noticee to inspect the books of active registered Authorised Person as per the applicable guidelines.
6. Non-reporting of details of active clients mapped to Authorized Persons.
7. Entrusting the CTCL/dealer terminals to its clients other than Approved Persons.
8. Inadequate supervision of AP’s by the Noticee.

SEBI Order: Having considered the facts and circumstances of the case, the material available on record, the factors mentioned in 15J of SEBI Act and also taking into account judgment of the Hon’ble Supreme Court in SEBI vs. Bhavesh Pabari (2019) 5 SCC 90 and in exercise of power conferred under Section 15I of the SEBI Act read with Rule 5 of the SEBI Adjudication Rules, the following penalty is imposed under Sections 15HB and 15A(b) of the SEBI Act, as applicable on the Noticee:

Name of the Entity Reliance Securities Limited (Noticee)
1.     Under Section 15HB of the SEBI Act Penalty Provisions Penalty (Rs.) of Rs 7,00,000/- (Rupees Seven Lakhs Only)

2.     Under Section 15A(b) of the SEBI Act Penalty Provisions Penalty (Rs.) of Rs 2,00,000/- (Rupees Two Lakhs Only)

3.     Total Rs 9,00,000/- (Rupees Nine Lakhs Only)

For details: https://lnkd.in/g_uUn3js

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