Description

SEBI final order against Gogia Capital Services Limited (Stock Broker INZ000202733) for violations including net worth shortfall, improper maintenance of books of accounts, engagement in other business, and non-settlement of client funds and securities.

Summary

SEBI has issued a final order under Section 12(3) of the SEBI Act, 1992 read with Regulation 27 of SEBI (Intermediaries) Regulations, 2008 against Gogia Capital Services Limited (Registration No. INZ000202733, PAN: AAACG2906L), a registered stock broker. The order follows a thematic inspection conducted by SEBI along with BSE, NSE, and MCX for the period April 1, 2022 to July 31, 2023. The Designated Authority issued a show cause notice on March 28, 2024 for multiple regulatory violations.

Key Points

  • Gogia Capital Services Limited is a SEBI-registered stock broker (Reg. No. INZ000202733)
  • Thematic inspection conducted for period April 1, 2022 to July 31, 2023
  • Inspection findings communicated on November 30, 2023
  • Enquiry proceedings initiated on March 6, 2024 under SEBI (Intermediaries) Regulations, 2008
  • Show cause notice issued on March 28, 2024 by Designated Authority
  • Multiple violations identified across net worth, business operations, and client fund management

Regulatory Violations Identified

1. Net Worth Shortfall and Improper Maintenance of Books of Accounts

  • Violation of Section 12(1) of SEBI Act, 1992
  • Non-compliance with SEBI Circular FITTC/DC/CIR-1/98 dated June 16, 1998
  • Breach of Regulation 9(g) read with Schedule VI of Stock Brokers Regulations

2. Engagement in Other Business Activities

  • Violation of Rule 8(3)(f) of SCRR
  • Non-compliance with SEBI Master Circular SEBI/HO/MIRSD/MIRSD-PoD-1/CIR/2023/71 dated May 17, 2023
  • Breach of SEBI Circular SMD/Policy/Cir-6 dated May 7, 1997
  • Stock broker engaged as principal or employee in business other than securities involving personal financial liability

3. Non-Settlement of Clients’ Funds and Securities

  • Violation of Clause 47.1.1 and 47.8 of SEBI Master Circular
  • Non-compliance with Clause 12(e) of Annexure A of SEBI Circular MIRSD/SE/Cir-19/2009 dated December 3, 2009
  • Breach of Clause 8.1 of SEBI Circular SEBI/HO/MIRSD/MIRSD2/CIR/P/2016/95 dated September 26, 2016
  • Violation of Clause 5.4 of SEBI Circular SEBI/HO/MIRSD/DOP/P/CIR/2021/577 dated June 16, 2021
  • Non-compliance with SEBI Circular SEBI/HO/MIRSD/DOP/P/CIR/2022/101 dated 2022

Compliance Requirements

  • Stock brokers must maintain minimum net worth requirements at all times
  • Proper maintenance of books of accounts as per regulatory standards is mandatory
  • Stock brokers cannot engage in other business activities involving personal financial liability
  • Timely settlement of client funds and securities is required as per SEBI circulars
  • Compliance with all provisions of SEBI (Stock Brokers) Regulations, 1992
  • Adherence to SEBI (Intermediaries) Regulations, 2008

Important Dates

  • Inspection Period: April 1, 2022 to July 31, 2023
  • Inspection Findings Communicated: November 30, 2023
  • Noticee Reply Submitted: December 5, 2023
  • Designated Authority Appointed: March 6, 2024
  • Show Cause Notice Issued: March 28, 2024
  • Circular Published: October 7, 2025

Impact Assessment

This enforcement action demonstrates SEBI’s strict oversight of stock brokers and intermediaries. The violations identified are serious in nature, particularly the non-settlement of client funds and securities, which directly impacts investor protection. The net worth shortfall and engagement in other business activities indicate systemic compliance failures. This case serves as a reminder to all registered intermediaries about the importance of maintaining regulatory compliance, proper financial controls, and prioritizing client fund protection. Market participants should note that SEBI continues to conduct thematic inspections and take enforcement action against non-compliant intermediaries under Section 12(3) of the SEBI Act.

Impact Justification

High importance due to SEBI enforcement action under Section 12(3) with multiple serious violations by a registered stock broker. Medium market impact as it affects one intermediary rather than broader market operations.