MUMBAI: The markets watchdog Sebi has cancelled the registration of as many as 39 stock brokers and seven commodity brokers for not meeting their registration requirements apart from cancelling the registration of 22 depository participants who aren’t affiliated with any depositories.
The main reason for cancelling their registration certificates is to prevent them from misusing their Sebi registration, thereby protecting unaware investors, the regulator said in three separate orders on Friday.
The 39 stock brokers whose registrations were cancelled include Bezel Stock Brokers, Reflection Investments, Sumpoorna Portfolio, Vineet Securities, Quantum Global Securities, Wellindia Securities, Vrise Securities, Credential Stockbrokers, Aanya Commodities, Amber Solutions, Arcadia Share & Stockbrokers and CM Goenka Stockbrokers and Destiny Securities among others.
The seven commodity brokers with now cancelled registrations are Wealth Mantra Commodities, Sumpoorna Comtrade, Chaitanya Commodities, BVK Pulses Online Trading Company, Infonic India Financial Services, Financial Leaders Commodities and Wellindia Commodities Integrated Stock Broking Services.
The 22 entities whose registration has been cancelled as depository participants include Moongipa Investments, ASL Capital Holdings, Atlanta Share Shopee, Wealth Mantra, Punjab & Maharashtra Co-Operative Bank, Max Planwealth Securities, and Bright Shares & Stocks, among others, according to the Sebi orders.
Despite the cancellation of their registration, these entities remain liable for any actions they took or failed to take as stock brokers, commodity brokers or depository participants, Sebi said in the order which also said they will also be responsible for paying any outstanding fees, dues, and interest owed to Sebi.
In the three separate orders, Sebi said 39 stockbrokers and seven commodity brokers were granted registrations subject to certain conditions, including the condition that they continue to be members of a recognised stock exchange.
Considering these entities are no longer members of any stock exchange, Sebi said they no longer meet the conditions required for holding a stock broker registration under the Broker Regulations Rules 1992, which stipulates that stock brokers must be members of recognised stock exchanges.
Sebi further said these entities were expelled as members by the stock exchanges.
"Since the notices are no longer holding membership of any recognised stock exchange, they no longer fulfil the conditions stipulated under the Broker Regulations Rules of 1992 by which certificate of registration was granted to the notices," Sebi said.
Of the 22 depository participants, depositories have informed the regulator that their agreements with these entities were terminated and this has been communicated to them. Therefore, these entities are no longer participants in any depositories and do not meet the registration requirements under these norms.
Also, Sebi said all these entities will have to ensure to "arrange for maintenance and preservation of records and other documents required to be maintained under the relevant regulations; redressal of investor grievances; transfer of records, funds or securities of its clients; continuity of service to its clients; and necessary actions with respect to the defaults or pending action, if any".