Sebi Slaps Rs 7 Lakh Fine on Reliance Securities for Compliance Breach

Sebi imposed a Rs 7 lakh fine on Reliance Securities for violating stock broker norms. The probe found incorrect client statements and non-compliance with risk-based supervision. The broking firm also faced adverse cybersecurity audit findings and passed upfront penalties to clients contrary to regulations.

The Securities and Exchange Board of India (Sebi) has imposed a penalty of Rs 7 lakh on Reliance Securities for failing to adhere to stock brokers' norms. The market regulator directed the firm to pay the fine within 45 days, following an inspection conducted from December 2022 to January 2023.

During the inspection, Sebi found that Reliance Securities inaccurately reported daily margin statements to clients, misrepresented ledger balances, and failed to include Rs 312.57 crore in funds available with clearing corporations in their risk-based supervision (RBS) reports. Additionally, the company wrongfully passed penalties to clients for shortages in upfront margin collections.

The examination also revealed adverse findings in cybersecurity audits over three periods, noting Reliance Securities' failure to conduct necessary product testing and designate a cybersecurity officer as required by regulations. As a result, Sebi levied the penalty on the stockbroking firm for non-compliance with industry norms.

(With inputs from agencies.)