SEBI Fines IIFL Securities Rs 11 Lakh For Compliance Failures
The penalty comprises Rs 9 lakh under the SEBI Act and Rs 2 lakh under the Securities Contracts Regulation Act.
The Securities and Exchange Board of India has imposed a penalty of Rs 11 lakh on IIFL Securities for failing to comply with regulatory guidelines.
The fine follows an inspection conducted from Aug. 18 to Aug. 25, 2022, which reviewed IIFL Securities' compliance from April 1 to July 31 of that year itself.
The penalty comprises Rs 9 lakh under the SEBI Act and Rs 2 lakh under the Securities Contracts Regulation Act.
SEBI noted that while IIFL Securities did not gain unfairly or cause investor losses, the violations of SEBI and the stock exchange guidelines were enough to impose a penalty.
The market regulator's inspection revealed multiple compliance lapses, including issues with the monthly and quarterly settlement of funds and securities, stock reconciliation, client collateral account closure, and margin reporting. SEBI also found that these violations were not repetitive.
Additionally, issues were noted in stock reconciliation processes and the closure of client collateral accounts.
Further violations included inadequate client unpaid securities account verification, errors in margin reporting and short collection. IIFL was also found lacking in passing penalties on short reporting of margins and in the verification of daily margin statements.
Other non-compliances involved margin trading funding verification and analysis of weekly bank balances, reflecting a broad spectrum of regulatory failures.
