The National Stock Exchange has barred YES Securities (India) Limited from onboarding new clients for three months and imposed a ₹2 lakh penalty over violations related to margin regulations and non-compliance with earlier directives. The brokerage has also been directed to refund charges recovered from affected clients.
Action Follows NSE Committee Order
According to an NSE circular, the action was taken by the NSE Member and Core Settlement Guarantee Fund Committee on May 26, 2026. The exchange found that the brokerage had continued practices linked to margin penalties despite earlier directions.
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NSE inspected the brokerage for the period between January 2025 and March 2025. During the review, it found that YES Securities had recovered margin shortfall and upfront margin-related penalties directly from clients in 211 instances involving 48 clients. The total amount involved was approximately ₹18.31 lakh.
Under exchange regulations, brokers are required to collect adequate upfront margins from clients before executing trades. Penalties imposed on brokers for margin shortfalls are not permitted to be passed on to clients.
Earlier Directions Not Fully Followed
The exchange noted that this was not the first instance of non-compliance. In December 2024, the committee had directed the brokerage to refund approximately ₹9.45 lakh collected from clients across 30 instances.
However, the latest inspection found that the firm had not fully complied with those directions and had continued similar practices during the subsequent period. The committee described the conduct as a pattern of continued defiance and non-compliance.
Under the latest order, the three-month restriction on onboarding new clients will come into effect after the expiry of the appeal period or after disposal of any appeal filed by the company. YES Securities has also been directed to refund all improperly collected amounts within 15 days and submit proof of compliance along with an auditor’s certificate.
Brokerage Argument Rejected
During the hearing, YES Securities argued that peak margin penalties and upfront margin penalties are distinct concepts. The company claimed that only peak margin-related penalties were passed on to clients and said it had sought clarification from the Securities and Exchange Board of India.
The NSE committee rejected the argument, stating that peak margin requirements are part of the broader upfront margin framework and that the rules had therefore been violated.
The exchange also issued a warning to the company’s compliance officer and senior management, asking them to ensure stricter adherence to regulatory norms in the future.
