SEBI Cancels Registration Of 39 Stock Brokers, Seven Commodity Brokers For Non-Compliance

The Securities and Exchange Board of India on Friday cancelled the registration of 39 stock brokers and seven commodity brokers for failing to meet registration requirements. The market regulator also revoked the registration of 22 depository participants who are no longer affiliated with any depository.

The regulator emphasised that the primary reason for cancelling these entities' registration certificates is to prevent them from misusing their SEBI registration without actively participating as a depository or being members of recognised stock exchanges. This move aims to protect unsuspecting investors, according to three separate orders issued by SEBI.

Despite the cancellation of their registration, these entities remain accountable for any actions taken or neglected in their roles as stock brokers, commodity brokers, or depository participants. They are also responsible for settling any outstanding fees, dues, and interest owed to SEBI, it said.

The 39 stock brokers and seven commodity brokers were granted registration on the condition that they remain members of a recognised stock exchange, SEBI said. However, since these entities are no longer members of any stock exchange, the regulator determined that they no longer meet the requirements outlined in the Broker Regulations of 1992, which mandate that stock brokers must be members of recognised exchanges.

These entities were expelled from membership by the stock exchanges, and SEBI was informed of their status.

After following the appropriate procedures under the Intermediaries Regulations of 2008, SEBI cancelled the registration certificates of these stock brokers.

Regarding the 22 depository participants, SEBI noted that the depositories had informed the regulator of the termination of their agreements with these entities. As a result, these entities no longer meet the registration criteria under the DP Regulations of 2018, leading to the cancellation of their registration following the procedures outlined in the Intermediaries Regulations of 2008.

SEBI also stated that all these entities must ensure they arrange for maintenance and preservation of records and other documents required to be maintained under the relevant regulations, redressal of investor grievances, transfer of records, funds or securities of its clients, continuity of service to its clients and necessary actions with respect to the defaults or pending actions, if any.

The 39 stock brokers whose registrations have been cancelled include Bezel Stock Brokers, Reflection Investments, Sumpoorna Portfolio, Vineet Securities, Quantum Global Securities, Wellindia Securities, Vrise Securities, Credential Stock Brokers, Aanya Commodities, Amber Solutions, Arcadia Share & Stock Brokers and C.M. Goenka Stock Brokers, Destiny Securities.

Seven commodity brokers whose registrations have been cancelled are Wealth Mantra Commodities, Sumpoorna Comtrade, Chaitanya Commodities, BVK Pulses Online Trading Company, Infonic India Financial Services, Financial Leaders Commodities, Wellindia Commodities Integrated Stock Broking Services, Moongipa Investments, ASL Capital Holdings, Atlanta Share Shopee, Wealth Mantra, Punjab and Maharashtra Co-Operative Bank, Max Planwealth Securities, Bright Shares and Stock are among the 22 entities whose registration has been cancelled as depository participants.

(With inputs from PTI).