SEBI imposes 1m rupees penalty on Anand Rathi Share and Stock

The Securities and Exchange Board of India (SEBI) has imposed a penalty of ₹10 lakh on Anand Rathi Share and Stock Broker Limited for regulatory violations identified during inspections. The penalty, announced in August 2023, follows an investigation into the firm's compliance with stock broker regulations and circulars issued by SEBI, the National Stock Exchange (NSE), and the Bombay Stock Exchange (BSE). Key findings included instances of short collections of margin/MTM (mark-to-market) amounts totaling ₹33.16 lakh, failure to submit supporting documentation for margin adjustments, and 10 unreported technical glitches on trading platforms between April 2022 and October 2023.

Additionally, SEBI identified unauthorized trading activities and mismanagement of client funds in earlier inspections. For example, between April 2020 and October 2021, the firm was found to have misused client funds ranging from ₹22.07 lakh to ₹16.36 crore, failed to maintain daily reconciliation statements, and executed 28 trades without client consent. A separate 2023 inspection also revealed that the firm did not conduct proper inspections of trading terminals operated by authorized persons, with terminals located at unreported or non-compliant locations.

SEBI emphasized that as a registered intermediary, Anand Rathi was obligated to adhere to regulatory norms, including immediate reporting of technical disruptions and accurate margin reporting. The regulator directed the firm to pay the penalty within 45 days through its online portal. This action aligns with SEBI's broader efforts to enforce compliance and safeguard investor interests in capital markets.