SEBI has imposed a fine of Rs 9 lakh on Reliance Securities for violating market rules as well as rules of stock brokers. The order comes after a subjective onsite examination of the accounts, records and other documents of authorized persons of SEBI-registered share broker Reliance Securities Limited (RSL) by the regulator and stock exchanges, NSE and BSE.
What is the matter?
This inspection was conducted to ascertain whether the provisions of Stock Broker Rules, NSEIL Capital Market Regulations and NSE Future & Options Trading Norms are being maintained in the manner required by RSL. This inspection was conducted for the period from April, 2022 to December, 2023.
Show cause notice was issued earlier
According to the findings of the inspection, the Securities and Exchange Board of India (SEBI) issued a show cause notice to RSL on August 23, 2024. In the 47-page order, SEBI found several violations committed by RSL and its authorized persons. These include not maintaining adequate mechanisms to record client order placement, inconsistencies in terminal locations and lack of isolation in offices shared with other brokers.
The inspection also found that RSL failed to maintain required order planning records for offline customers linked to its authorized persons – Jitendra Kambad and Naitik Shah. SEBI has ordered brokers to maintain verifiable evidence of customer orders to ensure transparency and prevent unauthorized trading.