In its probe SEBI found that SMC Global Securities had collected margins in non-permissible forms from the trading members which resulted in short collection along with wrong reporting of margins
The Securities Appellate Tribunal (SAT) on Friday upheld market regulator Securities and Exchange Board of India (SEBI)'s order restraining SMC Global Securities from taking up any new assignments in view of the violations related to reporting of margin and delay in collection of dues from trading members.
SEBI had found that SMC Global Securities failed to collect requisite margin money from two trading members Sunchan Securities and Ganga Yamuna Finvest, and that it had allowed them to take additional positions.
Accordingly, in August 2013, SEBI had prohibited SMC Global Securities from taking up any new assignment or contract and launching a new scheme for three months following which the entity had filed an appeal with SAT against the ruling.
In an order, SAT ruled that it has found "no reason to interfere with the (SEBI's) impugned order, which is hereby upheld, and the appeal is dismissed...."
Among others, SAT noted that brokers Sunchan and Ganga Yamuna continued to default in fulfilling their margin obligation towards SMC Global Securities and the entity went on giving excessive exposure to the two trading members "which has been rightly viewed seriously by SEBI".
The tribunal observed that margin money played an important role in containing risks which are inherent in the functioning of any capital market.
"Owing to its non-adherence, huge market crashes have been witnessed all over the globe in the recent past," SAT said.
"It is, therefore, pertinent for all market players to maintain the sanctity of margining as a risk management tool while dealing in securities, be it in the cash or in the F&O (Futures & Options) segment," it added.
After receiving complaints from investors, SEBI had directed the NSE to examine the matter. Besides, the regulator had also initiated a probe.
SEBI, in its probe, found that SMC Global Securities had collected margins in non-permissible forms from the trading members which resulted in short collection along with wrong reporting of margins.
This shortfall in the collection of required margins from trading members indicated that the same was funded by SMC Global Securities to maintain the margin obligations.
In its submissions to SAT, SEBI said due to the default by the two trading members "the stock exchanges had to redress investor complaints/claims by utilising funds from the Investor Protection Fund to make good the claims of the clients of Sunchan and Ganga Yamuna".
Satya Pal Singh, who was due to retire next year, is reportedly considering contesting the upcoming Lok Sabha polls either from Mumbai or Uttar Pradesh, his native state
Mumbai Police Commissioner Satya Pal Singh has resigned from service amidst reports that he was keen on contesting the Lok Sabha polls. While there are speculations that he may join either the Bharatiya Janata Party (BJP) or Aam Admi Party (AAP), Singh, in an interview to ABP News, has praised Narendra Modi.
On Thursday night, the 1980-batch officer from the Indian Police Service (IPS) submitted his resignation letter to the Maharashtra Home Ministry, which forwarded it to the chief minister's Office for acceptance.
Singh, who was due to retire next year, is reportedly considering contesting the upcoming Lok Sabha polls either from Mumbai or Uttar Pradesh, his native state.
There was no confirmation from Singh on his political foray but according to some reports, he has offers from BJP as well as Arvind Kejriwal-led AAP.
During the December quarter, Shriram City Union Finance reported higher net profit to Rs129 crore due on healthy growth in its net interest income
Shriram City Union Finance Ltd (Shriram City), the non-banking financial company (NBFC) of Shriram group, said its third quarter net profit grew 15% due to increase in its net interest income (NII).
For the quarter to end-December, Shriram City said, its net profit rose to Rs129.09 crore from Rs112.52 crore, despite its total revenues, including interest income, declining 2% to Rs796.24 crore from Rs813.54 crore, same period last year.
Shriram City said its December quarter NII increased 13% to Rs479.67 crore from Rs424.96 crore, a year ago.
December quarter net interest margin (NIM) of Shriram city stood at 12.35% as compared to 11.59% of same period last year.
The lender said during the December quarter, its finance cost reduced 15% to Rs332.39 crore compared with Rs388.78 crore a year ago period.
As on 31 December 2013, Shriram City’s gross non-performing assets (GNPA) stood at 2.51% compared with 1.57% same period last year. The capital adequacy ratio stood at 24.26% as on 31 December 2013.
In December, Shriram City made a public issue of secured non-convertible debentures (NCDs) to raise Rs100 crore.
Shriram City paid an interim dividend of Rs4 per equity share during November.
At 3.52 Friday, Shriram City was trading 1.2% up at Rs982 on the BSE, while the 30-share benchmark was flat at 20,498.
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