Regulation 26 - Liability for monetary penalty - Securities and Exchange Board of India (Stock Brokers) Regulations, 1992

1 [Liability for monetary penalty. 26. A stock broker 5 [****] shall be liable for monetary penalty in respect of the following violations, namely- (i) Failure to file any return or report with the Board. (ii) Failure to furnish any information, books or other documents within 15 days of issue of notice by the Board. (iii) Failure to maintain books of account or records as per the Act, rules or regulations framed thereunder. (iv) Failure to redress the grievances of investors within 30 days of receipts of notice from the Board. (v) Failure to issue contract notes in the form and manner specified by the Stock Exchange of which such broker is a member. (vi) Failure to deliver any security or make payment of the amount due to the investor within 48 hours of the settlement of trade unless the client has agreed in writing otherwise. (vii) Charging of brokerage which is in excess of brokerage specified in the regulations or the bye-laws of the stock exchange. (viii) Dealing in securities of a body corporate listed on any stock exchange on his own behalf or on behalf of any other person on the basis of any unpublished price sensitive information. (ix) Procuring or communicating any unpublished price sensitive information except as required in the ordinary course of business or under any law. (x) Counselling any person to deal in securities of any body corporate on the basis of unpublished price sensitive information. (xi) Indulging in fraudulent and unfair trade practices relating to securities. 2 [(xii) Failure to maintain client account opening form.] (xiii) Failure to segregate his own funds or securities from the client s funds or securities or using the securities or funds of the client for his own purpose or for purpose of any other client. 4 [ **** ] (xv) Failure to comply with directions issued by the Board under the Act or the regulations framed thereunder. (xvi) Failure to exercise due skill, care and diligence. 3 [(xvii) Failure to obtain prior approval of the Board in case of change in control of the stock broker.] (xviii) Failure to satisfy the net worth or capital adequacy norms, if any, specified by the Board. (xix) Extending use of trading terminal to any unauthorized person or place. (xx) Violations for which no separate penalty has been provided under these regulations. ] ************** NOTES:- 1 Regulations 25 to 28 substituted for regulation 25 by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2003, w.e.f. 20-11-2003. 2 Substituted by the SEBI (Stock Brokers and Sub-brokers) (Second Amdt.) Regulations, 2011, w.e.f. 17-08-2011. Prior to the substation, it read as under: (xii) Execution of trade without entering into agreement with the client under the Act, rules or regulations framed there under or failure to maintain client registration form or commission of any irregularities in maintaining the client agreement. 3 Substituted by the SEBI(Change in Conditions of Registration of Certain Intermediaries)(Amendment) Regulations, 2011, w.e.f. 19-04-2011. Prior to substitution, it read as under: Failure to seek prior permission of the Board in case of any change in its status and constitution. 4. Omitted vide Notification No. SEBI/LAD-NRO/GN/2018/27 dated 30-07-2018 w.e.f. 01-04-2019 before it was read as (xiv) Acting as an unregistered sub-broker or dealing with unregistered sub-brokers. 5. Omitted vide Notification No. SEBI/LAD-NRO/GN/2018/27 dated 30-07-2018 w.e.f. 01-04-2019 before it was read as or a sub-broker