Securities Appellate Tribunal (SAT) has upheld Sebi's order against Indira Securities in a case relating to non-compliance with stock broker regulations.
A penalty of Rs 16 lakh was imposed on Indira Securities, a member with both NSE and BSE, by the market regulator in December 2013 for failing to settle the running accounts of its clients on a quarterly basis, as mandated under the norms.
Subsequently, the stock broker had approached SAT, challenging the rulings of the Securities and Exchange Board of India (Sebi) in the case.
In a ruling dated June 23, SAT said it did not find "any infirmity" in the order.
"Principles of natural justice have been duly complied with in conducting the enquiry against the appellant (Indira Securities)," SAT said.
"Moreover, we have not found any cogent and convincing reason for the appellant not to comply with the mandatory provisions of Sebi's circular dated December 3, 2009 for a period of more than three years from the date of issuance of the circular till January 2013," it added.
In December 2009, Sebi had laid down that the actual settlement of funds and securities would be done by the broker within 24 hours or at least once in a calendar quarter or month, depending on the preference of the client.
All stock brokers were required to ensure full compliance of the norms by March 31, 2010. Sebi found that Indira Securities had not started quarterly or monthly settlement of funds and securities till January 2013.
The SAT order also said that "the maximum penalty prescribed by law may go up to Rs 1 crore" and therefore "a penalty of Rs 16 lakh is not disproportionate and commensurate with the violation of norms of law committed by the appellant".
