Reliance Securities Ltd. (RSL) has been fined for Rs 9 lakh by the Securities and Exchange Board of India (SEBI) for allegedly breaking stockbroker and market standards. The order comes after the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) carried out a thorough inspection.
The examination included scrutinising the books of accounts, records, and activities of RSL’s (Reliance Securities) authorized persons (APs) and took place between April 2022 and December 2023. The inspection’s goal was to confirm adherence to NSE Futures & Options (FO) trading standards, NSE Capital Market (CM) regulations, and stockbroker rules.
Violations cited by SEBI
In its 47-page order, SEBI found that RSL had violated several rules, such as failing to keep proper records of client order placements, having inconsistent terminal locations, not segregating offices shared with other brokers, and failing to keep proper records of offline client orders connected to APs, (authorised persons) namely Jitendra Kambad and Naitik Shah.
On August 23, 2024, SEBI sent Reliance Securities a show-cause notice after the inspection. Significant violations of important clauses intended to protect investor interests and market integrity were brought to light by the order.
RSL insisted that some of the differences were accidental. It claimed to have improved internal controls and disabled unauthorized terminals as part of its corrective action.
The regulator, however, dismissed these claims, contending that brokers must always remain in compliance and that remedial actions following an inspection do not make up for prior infractions. Reliance Securities broke NSEL FO, Stock Brokers, and NSEL CM rules by conducting these activities.
Ramification for Reliance Securities
The fine demonstrates how strictly Sebi enforces compliance requirements in the financial markets of India. Market participants are being cautioned about following regulatory requirements by this action. Regarding the fine and the accusations outlined in Sebi’s order, Reliance Securities has not yet responded.
