Karvy under SEBI’s radar over alleged payment delays

Our Bureau Mumbai | Updated on November 20, 2019

SEBI is examining Karvy Stock Broking with regard to complaints by clients about possible default on their dues. Ajay Tyagi, SEBI’s Chairman, told reporters on Wednesday that the regulator was examining a lot of complaints with regard to payment delays by the broker.

Tyagi also said they were working on improving systems and processes with regard to handling of client money by brokers.

Tyagi told reporters that they would also call for an explanation from the National Stock Exchange (NSE) on recurring technical glitches. There was heightened anxiety among the brokerage community on Tuesday on rumours of payment default by financial services firm Karvy that only got invigorated as many brokers could not see their margin positions on NSE.

Brokers were forced to square off position of several clients on NSE due to a technical glitch. Brokers have written a letter to NSE and exchange has said they have resolved the glitch. On Tuesday, had published the story and glitch and broker complaint to NSE.

With regard to Karvy, it is not only its equity and commodity clients but several employees in segments other than brokerage have posted videos and other material to protest against non-payment of salaries and provident fund, too. On the equity broking side, clients complained to the regulator that Karvy was not releasing their money, which was due after they sold their shares in the market.

Source connected to broker regulations at SEBI and stock exchanges told BusinessLine that they were trying to ascertain the amount of dues pending by Karvy to such clients. In a public clarification issued on Monday, Karvy said that it was honouring all commitments and that the problem is related to its commodity segment and not the broking arm.

Published on November 20, 2019

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