According to Sebi findings, Keynote had allegedly carried out the transactions pertaining to the expense account from the BSE client accounts as well as NSE clients' accounts.
The Securities and Exchange Board of India (Sebi) also found that Keynote had utilised funds from the clients for carrying out transaction with respect to its expenses account.
Keynote Capital is a Sebi registered stock broker and a member of BSE and NSE and the Multi Commodity Exchange of India (MCX).
Accordingly, Sebi has imposed "a penalty of Rs 5 lakh on the noticee viz Keynote Capital Ltd".
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Sebi had conducted an inspection into the books of accounts of Keynote Capital to examine whether it had complied with the provisions with respect to the segregation of funds and securities for the period from April 1, 2011 to August 31, 2012.
Further, the trading members cannot utilise the said client accounts for any purposes other than for client related transactions.