SEBI finds ₹28.52 crore in inactive client funds un-settled at IndusInd Securities

This is a final order by SEBI regarding Reliance Securities Limited (now IndusInd Securities Limited), examining alleged violations of compliance requirements related to client fund settlements, margin reporting, and other regulatory obligations during an inspection period from April 2021 to November 2022.

Who it concerns: Reliance Securities Limited (Now IndusInd Securities Limited)

What SEBI found or ordered

• SEBI conducted a joint inspection with stock exchanges from November 29, 2022, to December 08, 2022.
• Alleged non-settlement of funds for inactive clients totaling Rs. 28,52,17,101 across 10,102 instances.
• Alleged incorrect reporting of client cash and bank balances to exchanges in 5 instances, with discrepancies ranging from Rs. 1 lakh to Rs. 54 Crores.
• Alleged violation of margin trading limits where total exposure exceeded 50% of Net Worth and Borrowings in 19 instances.
• Alleged failure to resolve 82 client complaints within 30 days.
• The Designated Authority recommended a 'regulatory censure' against the Noticee.
• The Noticee filed a settlement application which was later withdrawn, leading to the resumption of enquiry proceedings.

Also in the document

• The order notes that the company was formerly known as Reliance Securities Limited and is now IndusInd Securities Limited.
• SEBI alleged that the company provided loans to associates or related companies engaged in businesses other than securities, potentially violating the Securities Contract (Regulations) Rules 1957.
• The inspection covered a period of approximately 20 months (April 2021 to November 2022).