SEBI cancels Certificate of Registration of Karvy Stock Broking

INDIA - Karvy Stock Broking's Certificate of Registration has been revoked by the Securities and Exchange Board of India (SEBI), a month after the SEBI suspended the brokerage firm from the securities market for embezzling client monies.

Irrespective of the cancellation of the Certificate of Registration, the Noticee (Karvy) will continue to remain liable for anything done or omitted to be done as a Stock Broker and continue to be liable for the payment of outstanding fees and dues, if any payable to SEBI Whole Time Member Ashwani Bhatia stated in his order.

Since a stock broker serves as a point of contact for individual investors in the securities market, they must uphold investors' trust by conducting business with high standards of honesty and fairness. The stock markets judged Karvy Broking to be in default and evicted it in November.

In light of the aforementioned, Bhatia stated, "Given that, I am likely to accept the recommendation in the DA report that the Certificate of Registration granted to the Noticee (Karvy Broking) be canceled.

Since a stock broker serves as a point of contact for individual investors in the market for securities, they must uphold investors' trust by conducting business with high standards of honesty and fairness. The stock markets judged Karvy Broking to be in default and evicted it in November.

In light of the aforementioned, Bhatia stated, "Given that, I am likely to accept the suggestion made in the DA report that the Certificate of Registration granted to the Noticee (Karvy Broking) be canceled.

The Securities and Exchange Board of India (SEBI) last month banned Karvy Stock Broking and its proprietor Comandur Parthasarathy for 7 years from the securities market and fined them Rs 21 crore for misappropriating client funds by abusing the Power of Attorney granted to it.

The market regulator stated in its final order that the brokerage siphoned off the money earned by pledging clients' securities to its group companies, Karvy Realty (India) Ltd and Karvy Capital Ltd.

Karvy Realty and Karvy Capital were ordered by the regulator to repay Rs. 1,442.95 billion that had been transferred to them by the brokerage firm. They have three months to refund the money to Karvy Stock Broking; otherwise, the NSE would seize the two companies' assets the NSE would seize the assets of the two companies to reclaim the money.

One of the largest scams in the Indian market occurred in 2019, with Karvy Broking, and since then, SEBI took action and reinforced the regulatory framework to protect investors' funds.