Sebi drops adjudication proceedings against Nuvama Wealth and Investment

Regulator finds lapses not serious enough for penalty

The Securities and Exchange Board of India (Sebi) has disposed of adjudication proceedings against Nuvama Wealth and Investment without imposing any monetary penalty, concluding that the violations observed during an inspection were not serious enough to warrant punitive action. 

 

Nuvama was inspected by the regulator for the period in August 2023 to assess compliance with stockbroking regulations, maintenance of records, and adherence to various circulars.

 

The inspection flagged several irregularities, including non-dispatch of physical contract notes, use of common or invalid email IDs and mobile numbers for multiple clients, inadequate maintenance of bounce logs, shortcomings in KYC verification, and questions over whether a client’s trading exposure matched their declared income.

 

 

Following these findings, Sebi had issued a show-cause notice to the broker in April 2024 alleging violations of multiple regulatory provisions.

 

In its response, Nuvama argued that the lapses were technical in nature, resulted from client misinformation, and did not indicate systemic issues or investor harm. It also said it had strengthened on-boarding procedures to prevent recurrence.

 

After considering the submissions and conducting hearings, the Adjudicating Officer noted that while lapses were evident, they neither involved fraud nor resulted in investor loss or disproportionate gain. He also observed that such deficiencies, arising from an inspection, need not automatically trigger penal action unless they are serious or repetitive.