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Sebi fines IFCI Financial Services for not complying with power of attorney norms

Press Trust of India  |  New Delhi 

Thursday slapped a Rs 2 lakh fine on for "lackadaisical behaviour" as it failed to comply with power of guidelines.

is a depository participant of Depositories Ltd and Central Depositories Securities Ltd.

In 2010, the regulator had issued guidelines to standardise the norms to be followed by stock brokers and depository participants while obtaining power of (POA) from their clients.

Accordingly, the standardised POA was required to be implemented latest by May 31, 2010 in case of new clients and September 1, 2010 for existing clients, said in its order.

However, pursuant to inspection conducted by the regulator in September 2014, observed that IFCI had implemented the circular for the new clients but had not completely updated the POA for existing clients.

As per the submission by IFCI, there were 1,651 existing clients whose POA had to be updated even after the regulator's inspection team pointed out its findings to the entity in 2015, Sebi said.

Even four years after IFCI was intimated about non-updation of POA, Sebi said the entity is still seeking time to implement the circular.

The regulator noted that the entity has adopted "lackadaisical behaviour" and it was expected from the registered market intermediaries to adhere to directions issued by Sebi within stipulated timelines.

Therefore, it finds that there is a violation of the Sebi circular by IFCI, the regulator said, and imposed a fine of Rs 2 lakh on

POA is executed by the client in favour of the stock and depository participant to authorise the to operate the client's demat account and account to facilitate the delivery of shares and pay-in/pay-out of funds.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, May 16 2019. 19:16 IST
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