Market regulator SEBI suspended Reliance Shares & Stock Broking Private Limited for four months from January 1, from trading in the market for violation of certain norms.
MUMBAI: Market regulator, the Securities and Exchange Board of India on Monday suspended Anil Dhirubhai Ambani Group's brokerage firm, Reliance Shares and Stock Broking Private Ltd, for four months due to violations of fair business practices on as many as 13 counts.
Securities and Exchange Board of India said in an order passed on Monday that registration of RSSB would be suspended for four months with effect from January 1, 2007.
According to the order, RSSB committed serious violations, such as artificial pricing of trades, omission in mentioning relevant entries in contract notes, conversion of trades to client trades, omission in mentioning of client ID for execution of trades, consolidation of client orders and unfair trade practices in violation of laws.
Artificial pricing of the trades, for example, has destroyed the sanctity of the contract notes, the prime evidence of transactions in the secondary market, it said.
Besides, the omission of most of the relevant entries in the contract notes defies the purpose of stock exchange trading wherein price of the scrip is determined by the market forces, the order said.
This kind of unfair trade practices cannot be in normal course viewed with any leniency where stock broker took over the role of stock exchange in determining the price of the scrip, the order said.
Reacting to the order, a RSSB spokesperson said the action relates to alleged procedural defects in the period 1999-2000, when RSSB was part of the combined Reliance group.
"RSSB will be filing an appeal before the Securities Appellate Tribunal, challenging the order, and seeking a stay thereof. RSSB now has an insignificant volume of business transactions, and there are no plans to expand the same," the RSSB spokesperson stated.
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