SEBI fines Motilal Oswal ₹7 lakh for violating stock brokerage regulations: Report

India's capital market regulator, the Securities and Exchange Board of India (SEBI), on Thursday, January 30, fined the brokerage Motilal Oswal Financial Services (MOFSL) ₹7 lakh after conducting an investigation over an alleged violation of stock brokerage regulations, reported multiple media outlets. 

SEBI imposed the penalty on the stock broker after inspecting the allegations between April 1, 2021 and June 30, 2022.

“After taking into consideration the facts and circumstances of the case, materials available on record, submissions made by the Noticee and also the factors mentioned in the preceding paragraphs, in the exercise of the powers conferred upon me under Section 15-I of the SEBI Act, 1992 r/w Rule 5 of the SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, I hereby impose a penalty of ₹7,00,000 (Rupees Seven Lakhs Only), as per Table below, on the Noticee, for the aforementioned violations, as discussed in this order. In my view, the said penalty will be commensurate with the violations committed by the Noticee,” according to the SEBI order cited in media reports. 

SEBI Findings

According to the reports, the SEBI investigation found that the brokerage violated regulations related to reporting and short-collection of margin. The market regulator observed that Motilal Oswal Financial Services did not upload the correct weekly data of cash and cash equivalent balances for 57 instances.

SEBI also found the MOFSL also violated regulations related to complaints and arbitration against the trading member. The regulator said that during the inspection period, 334 complaints were received on SCORES and directly from exchanges that were pending with the trading number for more than 30 days, as per the report.

The investigation also found that the company's books were found improperly maintained where narrations of the transactions were not correctly captured with the headers incorrect.

The company is mandated to pay the penalty within 45 days of the notice, as per the report. Motilal Oswal Financial Services shares closed 3.81 per cent lower at ₹645.55 after Thursday's market session, compared to ₹671.15 at the previous market close.

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