National Stock Exchange (NSE) on Monday suspended the license of Karvy Stock Broking with effect from today (December 2, 2019) due to non-compliance of the regulatory provisions of the Exchange.
In a circular, the exchange informed that the brokerage firm has been suspended from capital market, Futures & Options (F&O), Currency derivatives, Debt, Mutual Fund Service System (MFSS) and commodity derivatives segments.
Last month, capital market regulator Securities and Exchange Board of India (Sebi) had banned the brokerage firm from taking new clients and executing trades for misusing clients' funds. Sebi had said the unauthorised use of clients' funds creates a serious doubt over the conduct and integrity of KSBL.
This is one of the biggest cases of broker defaults in the equity segment and despite numerous regulations, the fact remains that clients' money and securities were brazenly misused for its own purposes by Karvy Stock Broking, the regulator had said.
The defaults are to the tune of Rs 2,000 crore and in an ex-parte order, Sebi has directed that pending forensic audit, KSBL is prohibited from taking new clients with respect to its stock broking activities.
READ MORE Sebi bans Karvy Stock Broking for Rs 2,000 crore client defaults