Description
SEBI final order under Section 12(3) against Swaraj Shares and Securities Pvt. Ltd. for violations of Merchant Banker regulations including due diligence failures and investor grievance compliance issues.
Summary
SEBI has issued a final order under Section 12(3) of the SEBI Act, 1992 against Swaraj Shares and Securities Pvt. Ltd. (SEBI Registration No. INM000012980) following an inspection conducted from March 5-6, 2024. The order addresses multiple compliance violations identified during the inspection period from March 28, 2023 to January 31, 2024.
Key Points
- SEBI conducted inspection of Swaraj Shares and Securities Pvt. Ltd., a registered Merchant Banker
- Inspection findings communicated on March 18, 2024 with company response submitted March 23, 2024
- Designated Authority appointed on April 19, 2024 to conduct enquiry proceedings
- Pre-enquiry show cause notice issued on May 9, 2024 with company reply dated September 22, 2024
- Personal hearing conducted on October 21, 2024 with additional submissions on October 25, 2024
- Final Enquiry Report submitted on November 11, 2024
Regulatory Changes
No new regulatory changes introduced. This is an enforcement action addressing existing compliance requirements under SEBI (Merchant Banker) Regulations, 1992 and SEBI (Intermediaries) Regulations, 2008.
Compliance Requirements
- Merchant bankers must exercise proper due diligence in takeover transactions
- Compliance with provisions pertaining to investor grievances is mandatory
- Accurate submission of periodic reports is required
- Full adherence to SEBI (Merchant Banker) Regulations, 1992 and applicable SEBI circulars
Important Dates
- March 5-6, 2024: SEBI inspection conducted
- March 18, 2024: Inspection findings communicated to company
- March 23, 2024: Company response submitted
- April 19, 2024: Designated Authority appointed
- May 9, 2024: Pre-enquiry show cause notice issued
- September 22, 2024: Company reply to show cause notice
- October 21, 2024: Personal hearing conducted
- November 11, 2024: Final Enquiry Report submitted
- December 6, 2024: Post-enquiry show cause notice issued
Impact Assessment
This enforcement action demonstrates SEBI’s continued focus on ensuring compliance by registered intermediaries. The violations identified include failure to exercise proper due diligence in takeover transactions, non-compliance with investor grievance provisions, and discrepancies in periodic reporting. While specific to one merchant banker, this serves as a reminder to all intermediaries about the importance of maintaining robust compliance frameworks and adherence to regulatory requirements.
Impact Justification
Regulatory enforcement action against specific merchant banker for compliance violations - important for industry oversight but limited direct market impact