Karvy Stock Broking barred from securities market for 7 years

The Registration Of Karvy Stock Broking Get Cancelled By Sebi

Karvy Stock Broking’s Certificate of Registration was revoked by the Securities and Exchange Board of India (SEBI) a month after the SEBI suspended the brokerage from the securities market for embezzling customer funds.

The Karvy Mishap

By utilizing the shares of its customers as collateral, Karvy has borrowed a total of 2,032.67 crores from financial institutions as of September 2019. Additionally, Karvy pledged securities worth $2,700 crore throughout that time.

In addition, according to Sebi’s report, the brokerage firm failed to settle clients’ funds and securities, was unable to provide information about bank accounts and depository participant accounts, and refused to work with the forensic auditor to assess the member’s assets and liabilities to clients accurately.

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Karvy was designated a defaulter and expelled by BSE and NSE in November 2020. Following that, Sebi revoked “the certificate of registration of Karvy Stock Broking Ltd” in accordance with the intermediary’s regulations.

Tussle Since 2019

The regulatory body issued an interim order preventing KSBL from taking on new brokerage clients in November 2019. This action was launched in response to the suspected misappropriation of client securities totaling more than 2,000 crores.

The interim order was issued as a result of NSE sending Sebi a preliminary report on violations related to Karvy Stock Broking’s pledge or improper use of the client’s securities. Finally, Sebi affirmed the directives through the interim order in November 2020.

As per Mint reports, The limited-purpose examination of Karvy Stock Broking that the exchange performed on August 19, 2019, which covered the period starting on January 1, 2019, resulted in the preliminary report sent to the exchange.

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About Pragna Chakraborty 254 Articles
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