NEW DELHI: The Securities and Exchange Board of India (Sebi) has imposed a Rs 10 lakh penalty on Axis Securities for breaching stockbroker regulations and other compliance norms. The firm has been directed to pay the fine within 45 days, the regulator stated in its order issued on Friday.
In its 82-page order, sebi found that Axis Securities had failed to adhere to regulatory procedures across multiple areas, including reporting discrepancies and improper handling of client funds.
The firm was found to have inconsistencies in its enhanced supervision reporting to stock exchanges, as well as mismatches between stock statements and actual holdings in depository accounts.
Sebi also noted that Axis Securities had not settled clients’ funds and securities according to their stated preferences and failed to provide retention statements with account details. Further, the firm passed on penalties imposed by stock exchanges for short collection of margins to its clients, which the regulator deemed improper.
The watchdog found that Axis Securities transferred securities of clients with credit balances to a “client unpaid securities account” and did not adequately address customer grievances. Additionally, the market regulator highlighted discrepancies in the brokerage firm’s reporting of politically exposed persons and margin trading exposure, with one instance of a shortfall in margin collection.
The penalty follows sebi’s inspection of Axis Securities covering the period from April 2021 to November 2022.