Merrill Lynch pays Rs 60 lakh as consent charges

Merrill Lynch Capital Markets Espana has paid Rs 60 lakh as consent charges to the Securities and Exchange Board of India (Sebi) for alleged non-compliance with market regulations. "The applicant without admitting or denying guilt has remitted a sum of Rs 60 lakh towards settlement charges," said a Sebi release.

The matter goes back to 2004 when Sebi investigated the dealings of various entities on May 17, 2004 when the Sensex fell more than 11 per cent or 565 points. It was found that Merrill Lynch Capital Markets Espana S.A S.V. executed a majority of the trades in the cash and derivative segment.

When asked to provide details of their major clients, Merrill Lynch failed to furnish information citing confidentiality provisions in the client agreement, said the Sebi order. The regulator also sent two show-cause notices to the entity in 2005.

According to the regulator, Merrill Lynch has been found in non-compliance of Regulations 20 and 20 A of Sebi (Foreign Institutional Investors) Regulations, 1995, Clauses 1, 2, 5 and 6 of the Code of Conduct as specified in Regulation 7A of FII Regulations read with the "Know your Client" (KYC) requirements as specified in Regulation 15A of FII Regulations.