Reliance Securities pays to settle irregularities case

Reliance Securities, part of the Reliance Anil Dhirubhai Ambani Group and which operates under the Reliance Money brand name, has paid Rs 25 lakh as settlement charges to the Securities and Exchange Board of India (Sebi). As part of the settlement, the domestic brokerage will not register any new clients during the next 45 days and will also spend Rs 1 crore on an investor education and awareness programme.

Reliance Securities was subject to Sebi investigation that revealed various irregularities such as excess securities transaction tax (STT) being collected from clients during 2006-08, power of attorney from clients in favour of Reliance Commodities, delay in updating online client ledger, not taking adequate steps to redress investor complaints within 30 days and absence of sound third-party checks for receipts of payments, among others. A showcause notice dated August 9, 2010, under the enquiry proceedings and August 31, 2010, under the cease and desist proceedings were issued to Reliance Securities.

 

Reacting to the Sebi consent order, a Reliance Securities spokesperson said there would be “no impact on existing customers of RSL” and “the existing customers will continue to trade on company’s state-of-the-art trading platforms”.
 

THE SETTLEMENT

• Rs 25 lakh paid as charges to the market regulator
• The brokerage can not register any new clients during the next 45 days
• It must spend Rs 1 crore on an investor education and awareness programme

A release sent by Reliance Securities yesterday announced the launch of its investor awareness programme that will cover “over 1,50,000 investors across the country within this financial year”.

According to the release, the company will be rolling out its programme in Punjab, Haryana and UP in the first phase, followed by south, west and east regions in phases. The programmes would be organised with the help of partners in state capitals, metros, Tier-I, Tier-II and Tier-III cities, with a special focus on eastern states.

“The applicant will spend Rs 1 crore on investor education and awareness programme and on the development of material focusing on making investors more aware of their rights in connection with internet-based trading in the securities market,” the Sebi order said.