Why SEBI Canceled Registration Of These 4 Stock Brokers

The capital markets regulator, SEBI, revoked the registrations of four stock brokers on Wednesday. The entities affected include Single Window Securities, Sunness Capital India, GACM Technologies, and Infotech Portfolio, as they failed to meet the necessary registration requirements.

In four separate orders, the markets watchdog has cited that the primary reason for the cancellation was to prevent these entities from misusing their registration status without being members of a recognized stock exchange, which could potentially mislead unaware investors.

“Since the entities are no longer holding membership of any recognised stock exchange, they no longer fulfil the conditions stipulated under Regulation 9 of the Broker Regulations by which Certificate of Registration was granted to them,” said SEBI order.

Major Reasons For The Cancellation

The stock brokers were misusing their registration certificate on unaware investors.

Regulatory Non-Compliance – The market regulator stated that the four brokers no longer meet the necessary conditions to hold a stock broker registration.

Membership Requirement – Under Broker Regulations, stock brokers must be members of recognized stock exchanges, a condition these brokers no longer fulfill.

Registration Cancellation – As a result, their stock broker registrations are being canceled.

Accountability for Past Actions – Despite the cancellation, the brokers remain liable for any past actions or failures in their role as stock brokers.

Financial Obligations – They must also clear any outstanding fees, dues, and interest owed to SEBI.

Considering these entities are no longer members of any stock exchange, Sebi noted that these entities no longer meet the conditions required for holding a stock broker registration under the Broker Regulations 1992, which stipulates that stock brokers must be members of recognized stock exchanges.

Since the entities are no longer holding membership of any recognised stock exchange, they no longer fulfil the conditions stipulated under Regulation 9(a) of the Broker Regulations, 1992, by which Certificate of Registration was granted to them, Sebi said. These entities were expelled as members by the stock exchanges, and the information was communicated. Following the proper procedures outlined in the Intermediaries Regulations, 2008, SEBI has cancelled the registration certificates of these stock brokers.