Sebi has suspended the registration of Century Finvest as a broker for one year in the wake of various violations, including allowing unregistered entities to operate its trading terminals.
Century Finvest is a registered broker and a member of the National Stock Exchange (NSE).
Following a complaint, Sebi along with the stock exchange conducted a joint inspection into the broker's dealings during January-February 2005 period.
Various irregularities such as executing transactions without entering into member-client agreement, lapses in collection of daily margin/upfront margin from clients and granting trading terminals at places other than its registered office were observed during the inspection.
It was also found that Century Finvest allotted trading terminals to its clients, "thereby aiding and abetting clients to act as unregistered sub-brokers," according to Sebi.
The watchdog noted that the inspection team found the firm has been dealing with a large number of clients whose names, trading volumes and delivery patterns indicated that a list of top 33 clients were acting on behalf of many other clients, "indicating that they were acting as unregistered sub-brokers."
"In the light of the facts and circumstances of the case, as also the mitigating factors... Including the fact that considerable time has elapsed since the alleged violations, I am of the view that a suspension of the registration of the noticee (Century Finvest) for a period of one year would commensurate with the violations committed by the noticee," Sebi's Whole Time Member S Raman said in his order.
Being a registered intermediary, the regulator said the entity was not expected to indulge in such fraudulent and manipulative practice in violation of the regulations.
