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This article is more than 1 year old.

BSE, NSE suspend Karvy Stock Broking's trading licence

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The BSE and the National Stock Exchange have suspended the licence of Karvy Stock Broking on Monday, citing non-compliance of the regulatory provisions of the exchanges.

BSE, NSE suspend Karvy Stock Broking's trading licence
The BSE and the National Stock Exchange have suspended the licence of Karvy Stock Broking on Monday, citing non-compliance of the regulatory provisions of the exchanges.
"BSE has deactivated trading terminals of the trading member, Karvy Stock Broking Ltd, in equity segment and debt segment and put them in RRM mode in equity derivatives, currency derivatives and commodity segment w.e.f. December 2, 2019," said BSE in a notice.
The move comes two weeks after the Securities and Exchange Board of India (Sebi) has banned Karvy Stock Broking from taking new client and executing trades. Sebi said the unauthorised use of clients' funds creates a serious doubt over the conduct and integrity of the brokerage.
The action followed leading bourse NSE forwarding a preliminary report to Sebi on the non-compliances observed with respect to the pledging/misuse of client securities by Karvy Stock Broking.
This is one of the biggest cases of broker defaults in the equity segment and despite numerous regulations, the fact remains that clients' money and securities were brazenly misused for its own purposes by Karvy Stock Broking.
The defaults are to the tune of Rs 2,000 crore and in an ex-parte order, Sebi has directed that pending forensic audit, KSBL is prohibited from taking new clients with respect to its stockbroking activities.
Karvy Group said that there is no instance where there has been the misuse of client securities. "The nature of this order is such that by definition, it is an ‘interim’ directive and not a final finding. The order itself states emphatically, that this is in response to preliminary findings and is subject to further review upon a more comprehensive audit and investigation," the group said.
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