On Wednesday, the Securities and Exchange Board of India (SEBI) announced that it has cancelled the registration of four stock brokers for failing to meet necessary requirements. These brokers include Single Window Securities, Sunness Capital India, GACM Technologies, and Infotech Portfolio.
The cancellation of their registrations comes after the brokers failed to meet the key condition of being members of a recognised stock exchange, which is a requirement under SEBI’s Broker Regulations of 1992. SEBI explained that these brokers were granted their registrations under the condition that they maintain membership with a recognised stock exchange. Since these brokers were no longer members of any recognised exchange, they no longer met the required conditions, leading to the cancellation.
SEBI issued four separate orders, highlighting the reason behind this decision the need to prevent misuse of their registration. Without being part of a recognised stock exchange, these brokers could potentially mislead or harm investors who may not be aware of their status. The regulator made it clear that even though their registrations have been cancelled, these brokers will remain liable for any actions they took or failed to take during their time as registered stock brokers. They will also be held accountable for any outstanding fees, dues, or interest owed to SEBI.
Under the SEBI regulations, stock brokers must be active members of recognised stock exchanges to maintain their registration. As these entities have been expelled from the exchanges, they no longer fulfill the necessary criteria outlined in Regulation 9(a) of the Broker Regulations, 1992.
SEBI has carefully followed the procedures in the Intermediaries Regulations of 2008 before taking this action. The regulators ensured that all steps were completed according to the set guidelines before cancelling the registration certificates of these brokers.
This move serves as a reminder of the importance of complying with the regulations set by SEBI to maintain a fair and transparent stock market environment. Investors are encouraged to verify the credentials of their brokers and ensure that they are registered and recognised by the relevant authorities.
