Allegations about Angel One’s Poor Supervisory & Compliance Practices Regarding ‘Authorised Persons’, NSE Lets the Broker Off with a Warning
Moneylife Digital Team 08 April 2023
Angel One Ltd (Angel) has emerged as one of the largest brokers in India. Quarter after quarter, it is reporting an excellent number of new client registrations and a large market share. However, its supervision and compliance practices seem to be lacking. Documents accessed by Moneylife show glaring lapses in Angel’s treatment of its authorised persons (APs), violating guidelines of the Securities and Exchange Board of India (SEBI). Findings of the National Stock Exchange (NSE)’s member and core settlement guarantee fund committee (MCSGFC) in the case of Mohan Raghavendran, one of Angel’s APs, have shed light on Angel’s operational affairs.
The MCSGFC has observed that Angel did not maintain appropriate evidence regarding orders placed by its clients through the AP. It has also observed that, after violations by the concerned AP came to Angel’s knowledge, it merely restricted its access to the company’s terminal and did not immediately cancel the registration of the AP, nor did it alert the investors in the location where the AP is operated, nor did it file a police complaint against the concerned AP.
Angel cancelled the AP’s registration and transferred the funds of its affected clients a full two years after his terminal access was restricted. During this period, the concerned AP could continue soliciting his services to Angel’s clients exposing them to the risk of fraud.
Moreover, in sample tests conducted in response to the complaint against Angel, more than 95% of the samples tested 'failed'. The complainant has also alleged that NSE dragged its feet in intervening in the matter and did not impose any fine on Angel. 
Additionally, the NSE has disclosed a list of APs whose registration has been cancelled by the Exchange. Out of 330 APs whose registration was cancelled, 60% of the APs belong to Angel. Please see the list here  
Moneylife had sent questionnaires to both Angel and NSE regarding this issue. While the questionnaire sent to Angel remained unanswered, NSE has responded that, as the arrangement was a private arrangement between the complainant and the AP without Angel being privy to the contents of the agreement, the grievance redressal committee (GRC) of the NSE dismissed the matter. NSE has also stated that it advised Angel to conduct an inspection of its top-3,000 APs to find any violation of SEBI guidelines. NSE’s order is here
It has been the practice, over the past few years in the Indian capital market, that the guilty party is asked to inspect and audit itself! In the NSE Colo (co-location) scam, SEBI asked NSE, which it regulates, to do the audit itself. Following that practice, NSE has now asked Angel to inspect itself.
Regarding the disproportionate share of cancelled APs belonging to Angel, NSE has nothing to say except that the list contains the names of APs against whom cancellation proceedings have been initiated by the trading members, themselves. 
Despite such glaring violations, NSE did not deem it fit to take any disciplinary or corrective action. To this, NSE has responded that it carried out a limited period investigation (LPI) covering aspects of assured returns, pre-order confirmation, and excess brokerage charge. for all the clients mapped to an AP referred to by the complainant and placed before its relevant committee.
arvind kumar singh
6 months ago
keep it up sir/mam.
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