Description
SEBI imposes adjudication proceedings against Choice Equity Broking Private Limited for violations related to Cyber Security & Cyber Resilience framework during inspection for period April 2023 to August 2024.
Summary
SEBI issued Adjudication Order No. Order/AK/RK/2025-26/31747 against Choice Equity Broking Private Limited (Registration No. INZ000160131, PAN: AADCC8390B) under Section 15-I of the SEBI Act, 1992. The order follows a joint thematic inspection conducted by SEBI along with BSE and MCX on September 30 and October 1, 2024. The inspection covered the period from April 1, 2023 to August 31, 2024 and identified irregularities in the broker’s operations related to Cyber Security & Cyber Resilience framework.
Key Points
- Choice Equity Broking Private Limited has been registered as a Stock Broker with SEBI since April 27, 2009
- Joint inspection conducted by SEBI, BSE, and MCX on September 30 and October 1, 2024
- Inspection period covered April 1, 2023 to August 31, 2024
- Violations identified related to Cyber Security & Cyber Resilience framework requirements
- SEBI approved initiation of adjudication proceedings on June 5, 2025
- Adjudicating Officer appointed on June 13, 2025 under Section 15-I of SEBI Act
- Show Cause Notice issued on June 27, 2025 (Ref. No. SEBI/HO/EAD/EAD1/P/OW/2025/17293/1)
- Noticee had previously received an Administrative warning in the matter
- Document inspection opportunity provided to Authorized Representative on July 29, 2025
Regulatory Changes
No new regulatory changes announced. This order enforces existing SEBI and BSE circulars related to Cyber Security & Cyber Resilience framework compliance requirements for stock brokers.
Compliance Requirements
- Stock brokers must maintain compliance with SEBI and BSE circulars on Cyber Security & Cyber Resilience framework
- Brokers must ensure proper implementation and maintenance of cyber security measures
- Non-compliance may result in adjudication proceedings under Section 15HB of SEBI Act
- Brokers subject to thematic inspections by SEBI in coordination with stock exchanges
Important Dates
- April 27, 2009: Choice Equity Broking Private Limited registered as Stock Broker
- April 1, 2023 to August 31, 2024: Inspection period
- September 30 - October 1, 2024: Joint inspection conducted
- June 5, 2025: SEBI approved initiation of adjudication proceedings
- June 13, 2025: Adjudicating Officer appointed
- June 27, 2025: Show Cause Notice issued
- July 29, 2025: Document inspection provided to Authorized Representative
- August 8, 2025: Noticee requested extension (document incomplete at this point)
Impact Assessment
Market Impact: Limited direct market impact as this affects a single stock broker entity. However, it signals SEBI’s continued focus on enforcing cyber security compliance across intermediaries.
Regulatory Impact: Reinforces the importance of cyber security and cyber resilience framework compliance for all registered stock brokers. The joint inspection approach (SEBI + exchanges) indicates coordinated regulatory oversight.
Operational Impact: Choice Equity Broking Private Limited faces potential penalties under Section 15HB of SEBI Act. Other brokers should review their cyber security frameworks to ensure compliance and avoid similar proceedings.
Industry Significance: Part of SEBI’s broader thematic inspection program focusing on cyber security, reflecting growing regulatory emphasis on digital infrastructure resilience in securities markets.
Impact Justification
Adjudication order against a registered stock broker for cyber security violations. Medium ranking as it affects one specific broker rather than systemic market changes, but highlights regulatory focus on cyber resilience framework compliance.