IIFL Securities announced in an exchange filing that the Securities Appellate Tribunal (SAT) has set aside an order by the Securities and Exchange Board of India (SEBI) restricting the stock broker from acquiring new clients. 

Shares of IIFL Securities hit a record high of Rs 134.40, up 13.99% from the previous closing price on the National Stock Exchange (NSE). At 12:50 pm, the stock was trading 5.09% higher at Rs 123.90. 

SEBI’s earlier order, dated June 19, 2023, prohibited IIFL Securities from onboarding new clients for two years in respect of its business as a stockbroker. A SAT bench led by Justice Tarun Agarwala set aside the order.

According to the order, SEBI had conducted an inspection of IIFL Securities’ books and processes pertaining to April 2011 to December 2013 to ascertain whether it was working in compliance with regulatory guidelines on the segregation of client securities.

The SAT bench said that since there was no failure on the part of the appellant to segregate funds of the clients or misuse funds of clients for its own purposes, no penalty could be imposed. However, penalties could be imposed for not segregating clients’ securities or funds.

The tribunal also lowered the penalty from SEBI’s initial fine of Rs 1 crore to Rs 20 lakh. Any amount deposited in excess shall be refunded to the appellant within four weeks from today.