Markets regulator Sebi today imposed a penalty of Rs 10 lakh on K A Gunderia & Co for non-settlement of funds and securities of clients.
The regulator had conducted an inspection of the books of accounts and other records of K A Gunderia & Co -- a Sebi registered stock broker -- to examine its compliance with various regulatory norms.
The inspection team of the Securities and Exchange Board of India (Sebi) had analysed a sample of 43 active clients out of total 422 of the stock broker who were maintaining running accounts with it.
Under Sebi norms, it is mandatory for all the member brokers to settle the running accounts of the clients on a monthly or quarterly basis.
From the sample, it was alleged that on nine instances funds were not settled and the amounts held in each of such clients' accounts during the quarter ended June, September and December 2015, March 2016 and June 2016 were more than Rs 10,000.
In its order, Sebi said there is an observation that securities of active clients have not been settled quarterly, for the quarters ending June 2015, September 2015 and December 2015, March 2016 and June 2016 in respect of 24 clients.
The regulator also noted that the stock broker has failed to settle the accounts despite internal audit observations.
By indulging in such activities, K A Gunderia & Co has failed to comply with the Stock Brokers Regulations and accordingly, the regulator has levied a fine of Rs 10 lakh on it.
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