Mumbai— The Securities and Exchange Board of India (SEBI) on Monday imposed a fine of Rs 7 lakh on Reliance Securities Limited for multiple violations of stockbroker regulations.
According to SEBI’s order, the company has 45 days to pay the penalty. SEBI conducted an inspection of Reliance Securities—a registered stockbroker—between December 22, 2022, and January 24, 2023, to assess compliance with applicable stockbroking rules.
During the inspection, SEBI identified several regulatory breaches. One of the key violations involved the company providing incorrect information in daily margin statements to clients on three separate occasions. Additionally, it reported inaccurate ledger balances in one instance. These discrepancies violate rules designed to maintain transparency and fairness in the securities market.
SEBI also found that Reliance Securities failed to comply with the Risk-Based Supervision (RBS) guidelines. Specifically, the company did not report cash collateral data, which is a critical component of effective risk management. For instance, while the company reported Rs 16.13 crore as total funds with banks and clearing members, it omitted Rs 312.57 crore actually held with clearing corporations and clearing members.
Another breach pertained to the mishandling of upfront margin penalties. The company incorrectly passed these penalties on to certain clients, which is prohibited under SEBI regulations.
Cybersecurity compliance was also a concern. SEBI noted that during three audit periods, Reliance Securities did not adhere to prescribed cybersecurity protocols. The company failed to test its products before deployment and did not appoint a Chief Information Security Officer (CISO), as required.
Audit reports for the periods of April–September 2021, October 2021–March 2022, and April–September 2022 each contained one adverse observation by auditors. SEBI emphasized that these recurring issues reflect a pattern of non-compliance with both stockbroking and cybersecurity standards.
“In light of these findings, SEBI has imposed a penalty of Rs 7 lakh on Reliance Securities Limited for violating regulatory norms,” the market regulator stated. (Source: IANS)
