The Securities and Exchange Board of India (SEBI) has imposed a monetary penalty of Rs 7 lakh on Reliance Securities for multiple violations of stockbroking regulations, following an inspection into the company’s operations.
SEBI conducted the inspection between December 22, 2022, and January 24, 2023, to assess the firm’s compliance with stockbroking activities. During the probe, the market regulator identified several lapses, including the misreporting of client data and non-adherence to risk-based supervision (RBS) norms.
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According to the findings, Reliance Securities submitted incorrect daily margin statements to clients on three occasions and inaccurately reported ledger balances once. Further scrutiny revealed discrepancies in the reporting of available funds.
While the broker reported Rs 16.13 crore to the exchange under RBS filings, SEBI found that an additional Rs 312.57 crore held with clearing corporations and clearing members had not been disclosed.
The investigation also highlighted that the broker had passed upfront penalties related to margin shortfalls onto clients — a practice expressly prohibited under SEBI guidelines.
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On the cybersecurity front, the regulator flagged adverse audit findings across three consecutive audit periods. These included the absence of a designated cybersecurity officer and the lack of product testing confirmation prior to deployment.
SEBI concluded that these infractions constitute serious non-compliance with stockbroking and cybersecurity norms, leading to the imposition of a Rs 7 lakh fine on Reliance Securities.