Description
SEBI imposes penalty on Prithvi Finmart Private Limited (Stock Broker) for violations related to monitoring of trading terminals used by Authorized Persons during inspection period January-June 2024.
Summary
SEBI issued an adjudication order against Prithvi Finmart Private Limited (SEBI Registration No. INZ000211637, PAN: AAECP8502D), a registered Stock Broker, following thematic inspection conducted on July 30, 2024 and August 21, 2024. The inspection examined compliance with monitoring requirements for trading terminals used by Authorized Persons (APs), specifically at the office of AP Rajesh Shantilal Vakharia, for the period January 1, 2024 to June 30, 2024. Violations of SEBI (Stock Brokers) Regulations, 1992 and applicable SEBI and Exchange Circulars were identified.
Key Points
- Adjudication proceedings initiated on April 7, 2025 under Section 15-I(1) of SEBI Act, 1992
- Adjudicating Officer appointed on April 28, 2025 to inquire into violations under Section 15HB of SEBI Act
- Show Cause Notice issued on May 20, 2025 (Notice No. SEBI/EAD/EAD-06/AK/DS/13501/1/2025)
- Noticee requested document inspection on May 26, 2025; inspection provided on June 4, 2025
- Noticee submitted reply on June 9, 2025
- Personal hearing conducted on July 11, 2025 with Authorized Representative appearing
- Violations relate to non-compliance with Stock Brokers Regulations and monitoring requirements for AP trading terminals
Regulatory Changes
No new regulatory changes introduced. This order enforces existing provisions of:
- SEBI (Stock Brokers) Regulations, 1992
- SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995
- Applicable SEBI and Stock Exchange Circulars regarding monitoring of trading terminals by Authorized Persons
Compliance Requirements
- Stock Brokers must ensure proper monitoring of trading terminals used by Authorized Persons
- Compliance with inspection requirements and cooperation with SEBI thematic inspections
- Adherence to Stock Brokers Regulations, 1992 and relevant SEBI/Exchange Circulars
- Maintenance of proper records and controls over AP trading activities
- Stock Brokers should review their monitoring systems for AP trading terminals to ensure compliance
Important Dates
- Inspection Period: January 1, 2024 to June 30, 2024
- Inspection Dates: July 30, 2024 and August 21, 2024
- Inspection Findings Communicated: December 14, 2024
- Noticee’s Reply: December 30, 2024
- Adjudication Proceedings Approved: April 7, 2025
- Adjudicating Officer Appointed: April 28, 2025
- Show Cause Notice Issued: May 20, 2025
- Document Inspection Request: May 26, 2025
- Document Inspection Provided: June 4, 2025
- Noticee’s Reply to SCN: June 9, 2025
- Personal Hearing Notice: June 30, 2025
- Personal Hearing Conducted: July 11, 2025
Impact Assessment
Market Impact: Limited - This is an individual enforcement action against a single stock broker with no broader market implications.
Operational Impact: Affects Prithvi Finmart Private Limited’s operations and potentially its Authorized Person Rajesh Shantilal Vakharia. The broker may face monetary penalties under Section 15HB of SEBI Act.
Industry Impact: Serves as a reminder to all stock brokers regarding the importance of monitoring trading terminals used by Authorized Persons and maintaining compliance with Stock Brokers Regulations. The case highlights SEBI’s focus on thematic inspections related to AP monitoring.
Compliance Impact: Stock brokers should review their internal controls and monitoring mechanisms for AP trading terminals to ensure compliance with applicable regulations and avoid similar violations.
Impact Justification
Individual stock broker compliance case with limited market-wide impact. Important for broker compliance standards but affects single entity.