SEBI orders Stockholding Services Limited over 162 client retention statement failures

This is a final order by SEBI regarding Stockholding Services Limited (formerly SHCIL Services Limited), a registered stock broker, concerning compliance violations identified during an inspection conducted between November 2022 and December 2022.

Stockholding Services Limited (Formerly SHCIL Services Limited)

• SEBI found the company failed to generate and send retention statements to clients in 162 instances.
• SEBI found the company retained excess client margins and failed to settle inactive clients as required.
• SEBI found mismatches between back-office records and actual client Demat account holdings, including excess shares in client Demat accounts across 47 ISINs worth Rs. 55.85 Lakhs.
• SEBI found the company failed to retain adequate End of Day (EOD) and Peak Margins in certain instances and incorrectly reported this to the exchange.
• SEBI found the company wrongfully passed on penalties levied by the clearing corporation to clients for short collection of upfront margin.
• SEBI found the company failed to maintain complete and accurate KYC records for clients.
• SEBI found the company failed to appoint a Chief Information Security Officer (CISO) and notify CERT-In as required.
• The Designated Authority recommended a regulatory censure against the company.

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