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    NSE suspends Karvy Stock Broking's licence due to non-compliance of regulatory provisions

    Synopsis

    Investors with accounts with the brokerage will be able to migrate to other brokers.

    An investigation by NSE had allegedly found that Karvy had sold client stocks pledged with it through associated entities and diverted the funds.
    NEW DELHI: In a major development, NSE on Monday suspended Karvy Stock Broking’s licence due to non-compliance of regulatory provisions of the exchange.

    This included its trading in capital market, futures & options, currency derivatives, debt, MFSS and commodity derivatives segments.

    Investors with accounts with the brokerage will be able to migrate to other brokers, ET NOW reported.

    An investigation by NSE had allegedly found that Karvy had sold client stocks pledged with it through associated entities and diverted the funds.

    After NSE, BSE also suspended Karvy Stock Broking due to non-compliance of the regulatory provisions of the exchange.

    “BSE has deactivated trading terminals of the trading member, Karvy Stock Broking in equity segment & debt segment and put them in RRM (risk reduction mode) mode in equity derivatives, currency derivatives and commodity segment w.e.f. December 2, 2019,” it said in a circular.

    Sebi recently banned Karvy Stock Broking for client defaults worth Rs 2,000 crore. It has been banned from taking on new clients and executing trades for existing customers.

    Karvy Stock Broking had moved the SAT seeking relief to allow the firm to tender securities for settlement. Sebi had restrained the brokerage from using clients’ Power of Attorney because of which they are unable to finish the settlement process of the shares.

    Securities Appellate Tribunal (SAT) had later asked the market regulator Sebi to decide whether Karvy Stock Broking could be given interim relief for use of Power of Attorney (PoA). The tribunal had directed the capital markets regulator to pass an order on Monday.

    Sebi had directed depositories not to act upon any instruction given by Karvy Stock Broking in pursuance of Power of Attorney given to the brokerage house by its clients with immediate effect. It also asked depositories to not allow the transfer of securities from depository participant account named Karvy Stock Broking with immediate effect.

    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds.)

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    20 Comments on this Story

    D Samanta255 days ago
    There is no meanings of any regulatory authority no meanings of Auditors, sab chor ha,you can do anything,only court case will gone and gone,only public will loose
    Madhu Cwm256 days ago
    they used to divert their mf customers to their brokerage business
    Madhu Cwm256 days ago
    bigger scam than sathyam
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