Stocks

Non-reporting of margins: SEBI asks bourses, clearing corps to devise framework for fines

PTI New Delhi | Updated on August 01, 2019 Published on August 01, 2019

Markets regulator Sebi on Thursday asked clearing corporations and stock exchanges to devise a standard framework for levying fine on trading members for non-reporting or misreporting of margins collected from clients.

The move is intended “to rationalise and bring uniformity in the manner of imposition of fine for ‘false or incorrect’ reporting of margin and ‘non-reporting’ of margin”, Sebi said in a circular. The exchanges and clearing corporations in all segments are required to devise such a framework in consultation with one another, it added.

For levying the penalty, the principle of ‘proportionality’ shall be considered and the fine shall be charged “based on the materiality of non-compliance done by the member which may include factors such as number of instances, repeated violations, etc,” Sebi said.

Also, the amount of fine to be imposed on the trading member “may extend to 100 per cent of such false/incorrectly/non reported amount of margin and/or suspension of trading for appropriate number of days”, the regulator said.

The circular will become effective from September 1, Sebi said. It noted that it was brought to the regulator’s notice by the stock exchanges that “there is need to harmonise the penalties” specified by Sebi through its earlier circulars issued in August 2011 and September 2016.

Published on August 01, 2019
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