SEBI slaps Rs 1.02 Cr penalty on Aditya Birla Money Ltd for violation of norms

New Delhi [India], October 4 : Markets regulator Securities and Exchange Board of India (SEBI) on Monday imposed a penalty of Rs 1.02 crore on Aditya Birla Money Ltd for the violation of provisions of Portfolio Managers (PM) regulations, Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) regulations, code of conduct under SEBI (Stock-Broker) Regulations,1992 and SEBI circulars.
The market regular issued the Adjudication Order (AO) on Monday found that violations by Birla Money Ltd were repetitive in nature.
According to AO Adjudication proceedings were initiated against Aditya Birla Money Ltd (ABML) based on a joint inspection of the ABML conducted by SEBI along with the Stock Exchanges, namely, Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), and depositories--Central Depository Services Limited (CDSL) and National Securities Depository Limited (NSDL) in March 2019 and a special purpose inspection conducted by SEBI Southern Regional Office (SEBI SRO) in March 2019.
Based on the findings of the inspection, adjudication proceedings were initiated against the ABML.
SEBI in its joint inspection found that there is a lack of Adequate Systems and Internal Controls. Investigation reveals that AMBL is Misleading the clients by understating losses and overstating profits.
The market regulator observed that ABML was charging for late payments in from its clients for F&O exposure, but it could not produce any document evidencing specific consent from the investors for the same. There was also a delay in uploading client details in the Central Know Your Client (CKYC) system.
"Under the section of 15HA of SEBI Act 1992, a penalty of Rs 75 lakh, Under the section of 15HB, a penalty of Rs 25 Lakh and Under the section of 23D of SCRA 1956 penalty of Rs two lakh, totalling penalty of Rs 1.02 cr were levied on ABML," SEBI said in a statement.
Aditya Birla Money Ltd has to pay the penalty within the next 45 days.