Markets regulator Sebi on Thursday barred stock broker PUG Securities from taking new clients for two months for its failure to maintain segregation of clients' securities.
However, the capital markets watchdog has allowed the broker to continue to provide services to its existing clients.
The Securities and Exchange Board of India (Sebi) conducted inspection of the books and accounts of PUG Securities Pvt Ltd (PSPL) from February 28, 2013 to March 1, 2013 to examine whether the requirement of segregation of funds and securities of clients have been complied by the broker.
The probe found that PSPL failed "to maintain segregations of clients' securities and pledge of shares of inactive clients having credit balance," thereby violated stock brokers' regulation.
Under the norms, brokers are required to segregate own securities and client securities.
Accordingly, Sebi has directed that "the noticee i.e. PUG Securities Pvt. Ltd., shall not take on board any new client for a period of two months from the date of this order. Nothing in this order shall prohibit the noticee from continuing to provide services to its existing clients"
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