SAT sets aside Rs4 lakh penalty imposed by SEBI
MDT/PTI 13 September 2012

SAT, while setting aside the SEBI order said that violations committed by the DSE Financial Services are mostly technical in nature and in some cases it has taken corrective measures

Mumbai: The Securities Appellate Tribunal (SAT) has set aside a Rs4 lakh penalty imposed by market regulator Securities and Exchange Board of India (SEBI) on a subsidiary of Delhi Stock Exchange (DSE) in April this year for not complying with certain rules, reports PTI.

 

In its order, SAT said that violations committed by the DSE Financial Services (DSFSL) are mostly technical in nature and in some cases it has taken corrective measures.

 

"The three violations committed by the appellant (DSFSL) are mostly technical in nature, some of them are solitary instances and for others the appellant has mostly taken corrective measures.

 

"In view of this, we are of the view that the adjudicating officer (of SEBI) was not justified in taking punitive action (against DSFSL)," SAT said. Consequently, SAT has set aside the "impugned order" passed by SEBI.

 

It further said, "We have also observed that every minor discrepancy/irregularity found during the course of inspection is not culpable and the object of the inspection could well be achieved by pointing out the irregularities/ deficiencies to the intermediary at the time of inspection and making it compliant."

 

SEBI had conducted an inspection of DSFSL during 8-23 February 2007 with regard to its activities as a stock broker and also as a depository participant of Central Depository Services (India) Ltd.

 

In an order dated 10 April 2012, SEBI had imposed a fine of Rs4 lakh on DSFSL for violating rules of functioning of its office and belongings.

 

"In exercise of the powers conferred upon the adjudicating officer under section 15 I of the SEBI Act...a penalty of Rs4 lakh has been imposed under sections 15F and 15 HB of the SEBI," the market regulator had said in a notification.

 

"...considering all the facts and circumstances of the case, ... a suitable penalty (Rs4 lakh) needs to be imposed on the noticee for the aforesaid violations or non-compliances," it had added.

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