Stock exchanges on Monday suspended the licence of Hyderabad-based financial services major Karvy Stock Broking for non-compliance of regulatory provisions.
"The National Stock Exchange (NSE) has suspended Karvy Stock Broking Ltd (KSBL) due to non-compliance of regulatory provisions of the exchange," it said in a circular.
Following NSE's action, BSE too deactivated trading terminals of Karvy in equity and debt segments and put them in RRM mode in equity derivatives, currency derivatives and commodity.
The suspension could impact thousands of clients. The move follows an order by market regulator Securities and Exchange Board of India's (SEBI) against Karvy for misuse of client funds.
Karvy has 12 lakh clients of which 3 lakh are active. On average, 20,000 to 25,000 clients transact on a daily basis.
A recent interim report by NSE said that securities worth Rs 2,300 crore of more than 95,000 clients were unauthorisedly transferred by KSBL.
EY currently is conducting a forensic audit on the brokerage to ascertain the exact misuse and extent of wrongdoing.
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