SEBI Slaps Rs.7 Lakh Penalty On Motilal Oswal Financial Services For Flouting Rules

SEBI slaps Rs.7 lakh penalty on Motilal Oswal Financial Services for flouting rules

Directs it to pay the fine within 45 days

The Securities and Exchange Board of India (SEBI) has imposed Rs.7 lakh on Motilal Oswal Financial Services Ltd for flouting stockbroker and depository participant rules.

The directions came after the market regulator inspected the stockbroker and depository participant, Motilal Oswal with stock exchanges and depositories from April 2021 to June 2022.

SEBI observed that the company did not resolve 26 complaints within 30 days. It transferred securities of credit balance clients to ‘a client unpaid securities account’, and incorrectly reported Margin Trading Funding (MTF) collaterals. Furthermore, in one instance, it wrongly reported a short collection of margins in the capital market segment and futures and options segment. In five instances, it misreported the currency derivatives.

SEBI noted that 39 clients traded in June 2022, who were considered inactive by the broker and their funds were parked aside. Amar Navlani, the Adjudicating Officer of SEBI remarked, "I find the allegation that the noticee (Motilal Oswal) while setting aside funds of Rs.3.50 crore belonging to 39 active clients, has shown incorrect reasons viz. non-availability of client's bank account and non-traceability of the client.”

He added, "The noticee being a SEBI-registered stockbroker and depository participant, was required to comply with the applicable provisions of securities laws but failed. Such failure and non-compliance need to be dealt with a suitable penalty.”