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The Securities and Exchange Board of India on Friday imposed a penalty of 3 lakh on the Bombay Stock Exchange (BSE) violation of Stock Exchanges and Clearing Corporations (SECC) Regulation, 2018.

The matter pertains to the exchanges’ acquisition of stake in various businesses without taking necessary approvals from the regulator. Sebi conducted its investigations to ascertain if the said investments made by BSE were unrelated or not incidental to its activity as a stock exchange.

As a part of the examination the regulator found that BSE had allegedly been engaged in unrelated activities with regards to acquisition of stake in the companies namely – BSE Technolgies, Marketplace EBIX Technology, BSE Tech Infra, BIL Reyson Futures and Indus Water Institute.

In the investigation Sebi found that BSE Technolgies could offer services only in two segments—Trade Recievables Discounting System and KYC Registration Agnecy. However, BTPL was also alleged to be offering other Informantion Technology-related services without Sebi’s approval.

With respect to other entities Sebi maintained that BSE and its subsidiaries acquired stake in other related companies without Sebi’s approval.

It was in January this year that a show cause notice was issue to BSE to show cause why an enquiry should not be initiated against it or why a penalty should not be imposed for the same.

Barnali Mukherjee, the adjudicating officer in her order said “It is not possible from the material available on record to ascertain the disproportionate gain or unfair advantage made by the noticee or the amount of loss caused to an investor or group of investors as a result of the default. I find that each activities constitute an independent violation and as such there are 3 instances of violations of the provisions of SECC Regulations, 2018 read with SECC Regulations, 2012.Thereby we impose a penalty of three lakhs to be paid within 45 days."

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