The Securities and Exchange Board of India (SEBI) has imposed a ₹7 lakh penalty on Motilal Oswal Financial Services Ltd for multiple violations of broker and depository participant regulations. The markets regulator has ordered the company to pay the fine within 45 days, according to a formal order issued on Thursday.
The penalty followed an inspection conducted jointly by SEBI, stock exchanges, and depositories, covering the period from April 2021 to June 2022.
Violations Identified During Inspection
SEBI’s investigation found that Motilal Oswal committed several breaches, including:
- Failing to resolve 26 client complaints within the required 30-day period.
- Transferring client securities to the “client unpaid securities account”.
- Incorrectly reporting Margin Trading Funding (MTF) collaterals to stock exchanges.
- Improper margin reporting and short collection in multiple segments, including capital markets, futures & options, and currency derivatives.
Additionally, SEBI found that ₹3.50 crore belonging to 39 clients classified as inactive had been improperly set aside, despite those clients trading in June 2022. The broker cited non-availability of client bank details and non-traceability as reasons for this action, which SEBI deemed incorrect.
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SEBI’s Adjudication
In the order, SEBI Adjudicating Officer Amar Navlani stated that Motilal Oswal’s actions violated securities laws and failed to meet compliance obligations as a SEBI-registered broker.
“The Noticee’s failure to comply with securities regulations requires a suitable penalty,” Navlani noted. As a result, SEBI imposed the ₹7 lakh fine to address the non-compliances and uphold regulatory standards. This action underscores SEBI’s commitment to enforcing compliance among brokers and depository participants to protect market integrity and investor interests.
