ICICI Securities Pays Rs40.2 Lakh To Settle Stockbroker Rules Violation Case with SEBI
Moneylife Digital Team 07 January 2025
ICICI Securities Ltd paid Rs40.2 lakh to settle a case of violation of stockbroker rules with market regulator Securities and Exchange Board of India (SEBI). SEBI issued the order after ICICI Securities proposed to settle the matter without admitting or denying the facts and conclusions of law, through a settlement.
 
Amit Kapoor, adjudicating officer (AO) of SEBI, passed the settlement order stating that the market regulator will not initiate any other enforcement action against ICICI Securities, the merchant banker, for these violations.
 
On 17 May 2024, SEBI issued a show-cause notice (SCN) to ICICI Securities for alleged failure to monitor the broker's authorised person (AP), as trading terminals of five users, allocated to the AP were being operated from unknown places, which were not reported to the exchange. 
 
Further, the SCN says ICICI Securities allegedly, did not have systems to monitor the trading practices of its AP, as the AP was using login credentials of the clients for online trading and the broker has, allegedly, not ensured that only the approved users operate the trading terminal allocated to them. 
 
Pending adjudication proceedings, on 18 July 2024, ICICI Securities proposed to settle the instant proceedings initiated against it, without admitting or denying the facts and conclusions of law, through a settlement order.
 
After attending meeting with the internal committee (IC) of SEBI on 10 September 2024, in terms of the Settlement Regulations, the stockbroker, on 25 September 2024 proposed revised settlement terms. 
 
The high powered advisory committee (HPAC) at its meeting on 28 October 2024, considered the settlement terms proposed and recommended that the case may be settled on payment of Rs40.20 lakh as settlement amount. 
 
The recommendation of the HPAC was approved by the panel of whole-time members (WTMs) of SEBI. On 1 January 2025, ICICI Securities informed SEBI about the remittance of Rs40.20 lakh. 
 
"In view of the acceptance of the settlement terms... The adjudication proceedings initiated against ICICI Securities vide SCN dated 17 May 2024 is disposed of in terms of the settlement regulations," Mr Kapoor, the SEBI AO says in the order.
 
Earlier in August 2024, ICICI Securities paid Rs69.82 lakh to SEBI to settle charges of regulatory violations, including questionable site visit reports, failure to undertake due diligence for an issue and contradictory statements in the draft red herring prospectus (DRHP) and news article in one of the issues. 
 
In September 2022, SEBI inspected ICICI Securities from 1 April 2020 to 31 March 2022. Based on its inspection report and response from the merchant banker, SEBI observed non-compliance with SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations) on three issues. (Read: ICICI Securities Pays Rs69.82 Lakh To Settle Case with SEBI)
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