On Monday, the Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs 1.02 crore on Aditya Birla Money Ltd for the violation of provisions of Portfolio Managers (PM) regulations, Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) regulations, code of conduct under SEBI (Stock-Broker) Regulations,1992 and SEBI circulars.

Markets regulator Securities and Exchange Board of India (SEBI) on Monday imposed a penalty of Rs 1.02 crore on Aditya Birla Money Ltd for the violation of provisions of Portfolio Managers (PM) regulations, Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) regulations, code of conduct under SEBI (Stock-Broker) Regulations,1992 and SEBI circulars.

The market regular issued the Adjudication Order (AO) on Monday found that violations by Birla Money Ltd were repetitive.

According to AO, Adjudication proceedings were initiated against Aditya Birla Money Ltd (ABML) based on a joint inspection of the ABML conducted by SEBI along with the Stock Exchanges, namely, Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), and depositories–Central Depository Services Limited (CDSL) and National Securities Depository Limited (NSDL) in March 2019 and a special purpose inspection conducted by SEBI Southern Regional Office (SEBI SRO) in March 2019.

Based on the findings of the inspection, adjudication proceedings were initiated against the ABML.
SEBI, in its joint inspection, found that there is a lack of Adequate Systems and Internal Controls. Investigation reveals that AMBL is Misleading the clients by understating losses and overstating profits.
The market regulator observed that ABML was charging for late payments from its clients for F&O exposure. Still, it could not produce any document evidencing specific consent from the investors for the same. There was also a delay in uploading client details in the Central Know Your Client (CKYC) system.