India market regulator bans IIFL Securities from signing new broking clients for 2 years (updated)

IIFL Capital Services

19/06/2023 14:28

(Adds background in paragraph 2, details of order in paragraph
3, comment from a IIFL source in paragraph 4)
       BENGALURU, June 19 (Reuters) - India's market regulator
on Monday banned the stockbroking unit of IIFL Securities
 IIFS.NS  from onboarding any new client for two years, citing
alleged misuse of client funds that came to light in 2013-2014.
     The Securities and Exchange Board of India (SEBI) inspected
the operations and accounts of IIFL Securities between April
2011 and January 2017 and found several alleged violations of
its rules, including mixing clients’ funds with its own funds
and utilizing credit balances in one client's account for the
needs of other.
        In its order, SEBI noted that the company has taken
corrective actions since then but added that some regulatory
action is necessary "in the light of gravity of violations
committed..."
  
        The company will appeal SEBI's order, said an official
who declined to be named as the person is not authorised to
speak to the media.
  

        
  

 (Reporting by Sethuraman NR in Bengaluru and Ira Dugal in
Mumbai; Editing by Dhanya Ann Thoppil)
 ((Sethuraman.NR@thomsonreuters.com; (+91 9945291420); Reuters
Messaging: nallur.sethuraman.thomsonreuters.com@reuters.net))