Capital market regulator Sebi today imposed a fine of Rs 5 lakh on Keynote Capital for failing to comply with stock broker norms.
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).
In an order today, the regulator ruled that "the noticee (Keynote Capital) did fail to comply with the standards of segregation of funds of clients with that of its own on various occasions and thereby, has not exercised due care and skill in carrying out the business of the stock broker".
Accordingly, Sebi has imposed "a penalty of Rs 5 lakh on the noticee viz Keynote Capital Ltd".
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.
As per norms, it is compulsory for brokers to keep the money of the clients in an account separate from their own.
Further, the trading members cannot utilise the said client accounts for any purposes other than for client related transactions.
