Markets regulator Sebi has barred BRH Wealth Kreators from taking new clients for six months for violating stock brokers' norms.
The Securities and Exchange Board of India (Sebi) conducted an inspection of the books and accounts of BRH Wealth Kreators from February 12- 22, 2012 to examine the irregularities or violations, if any, committed by it during the course of business for the period April 2010 to February 2012.
The probe found that BRH Wealth Kreators failed to collect the required margin from its clients in derivatives segment, failed or made delay in transfer of corporate benefits to its clients and was dealing with unregistered brokers.
By doing so, it violated the provision of stock brokers' norms.
Accordingly, the regulator in an order on Wednesday, directed BRH Wealth Kreators (formerly known as BMA Wealth Creators) shall not take on board any new client for a period of 6 months.
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The prohibition under this order shall be in addition to and run independent of the directions contained in Sebi orders passed in October, 2019 and January, 2020, it added.
Sebi, in its order in October, 2019 had barred the brokerage house from the capital markets for failing to segregate the securities and funds of its clients, providing misleading information to the exchanges, failing to unpledge and return the securities due to its clients and made unauthorized transfer of shares from clients' demat accounts.
The directions were confirmed by Sebi through an order in January 2020. Further, stock exchanges NSE and BSE have also declared the brokers as a defaulter.
In a separate order, Sebi cancelled the registration of Jaypee Capital as a depository participant for failing to inform the regulator about its termination by the depositories.
The failure on the part of the Noticee to inform Sebi of the termination of the agreement by the depositories would therefore have to be considered as a violation of...the Code of Conduct for the DPs (Depository Participants) as given under ... the DP Regulations, Sebi noted.
Depositories CDSL and NSDL has terminated their respective agreements with Jaypee Capital due to non compliance with rules.
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