SEBI finds Eastern Financiers lacked NISM certification, allowed unapproved users

This order details SEBI's adjudication of alleged regulatory violations by stock broker Eastern Financiers Limited, specifically concerning the conduct of its Authorized Persons (APs) regarding trade confirmations, certifications, and terminal usage.

Who it concerns: Eastern Financiers Limited (Noticee); Authorized Persons: M/s. Finwell Global Services, Mr. Hitesh P Sanghvi, Ms. Jonaki Biswas, Mr. Lakshman Kumar Bihani, Mr. Rohit Kumar Jain; Individuals mentioned in findings: Mr. Anil Shukla, Mr. Madhusudan Mondal, Mr. Rhiju Sengupta, Mr. Biswadeep Chatterjee, Ms. Nilima Sengupta, Ms. Daliya Chatterjee.

What SEBI found or ordered

• SEBI alleged that APs failed to maintain pre-order trade confirmations and could not provide call recordings or CCTV evidence for orders placed via telephone or in-person.
• SEBI alleged that APs Ms. Jonaki Biswas and Mr. Lakshman Kumar Bihani did not possess the mandatory NISM Series VII certification.
• SEBI alleged that CTCL terminals were operated by unapproved users, including Mr. Anil Shukla and Mr. Madhusudan Mondal, contrary to exchange records.
• SEBI alleged that M/s. Finwell Global Services failed to maintain proper segregation of its terminal from that of another broker (Master Capital Services Ltd.) at the same location.
• SEBI alleged that a terminal for AP Ms. Jonaki Biswas was found at an unregistered location and that the change of address was not notified to the exchange at least 30 days in advance.
• The order cites violations of SEBI (Stock Brokers) Regulations, 1992, SEBI Master Circular dated June 17, 2025, and BSE Circulars.

Also in the document

• The inspection period covered April 01, 2024, to April 30, 2025.
• SEBI noted that the Noticee admitted to several lapses in its replies, including the lack of NISM certification and the co-location of terminals.
• SEBI observed that the Noticee's claim that unapproved users operated terminals only on the day of inspection was not accepted for M/s. Finwell Global Services, as multiple trades over several months were executed by the unapproved user.
• The order mentions a complex relationship where partners of the AP (M/s. Finwell Global Services) are immediate relatives (mothers) of the partners of another entity (M/s. Folioport) operating a terminal for a different broker at the same location.