Description

SEBI adjudication proceedings against Nuvama Wealth and Investment Limited (stock broker) for violations of broker regulations during inspection period August 2023.

Summary

SEBI has issued Adjudication Order No. Order/BS/KH/2025-26/31822 against Nuvama Wealth and Investment Limited (Registration No. INZ000005231, PAN: AABCE9421H), a registered stock broker. The order follows a comprehensive inspection conducted from August 4-10, 2023, which identified violations of broker regulations and securities laws. The adjudication proceedings were initiated for alleged violations across multiple regulatory provisions related to F&O segment operations, client documentation requirements, and compliance with SEBI and exchange circulars.

Key Points

  • Nuvama Wealth and Investment Limited is a registered stock broker with SEBI (Registration No. INZ000005231)
  • SEBI conducted comprehensive inspection from August 4, 2023 to August 10, 2023
  • Inspection findings were communicated on September 4, 2023; Noticee responded on September 13, 2023
  • Adjudication Officer appointed on March 19, 2024 under Section 15I of SEBI Act, 1992
  • Multiple violations alleged across F&O regulations, client documentation, and broker compliance requirements

Regulatory Violations Alleged

F&O Segment Violations

  • Violation of Regulation 3.6 of F&O segment regulations
  • Non-compliance with SEBI Circular MRD/DoP/SE/Cir-20/2005 dated September 8, 2005 (Clauses 2.1, 2.2, 2.4.3 & 2.5.2)
  • Violation of Regulation 3.6A of F&O segment regulations and Regulation 3.5A of Part A of Capital market Regulations
  • Non-compliance with NSE circulars on F&O and Currency Derivative segments

Client Documentation Violations

  • Violation of Clause B(ii) & B(iv) of SEBI Circular CIR/MIRSD/15/2011 dated August 2, 2011
  • Non-compliance with multiple NSE circulars (2012-2018) regarding investor protection and inspection requirements
  • Non-compliance with MCX Business Rule Chapter 2 point 9.1(iv) and related MCX circulars (2016-2017)

Other Compliance Violations

  • Violation of Clause 1(vii) of SEBI Circular MISRD/Cir-26/2011 dated December 23, 2011
  • Non-compliance with SEBI circulars MIRSD/Cir-23/2011 and MIRSD/Cir-5/2012
  • Non-compliance with multiple NSE inspection circulars (2009-2018)
  • Violation of Clause 8(b) of SEBI Circular MIRSD/SE/Cir-19/2009 dated December 3, 2009
  • Non-compliance with NCDEX circular dated October 31, 2017

Compliance Requirements

  • Stock brokers must maintain books of accounts and records as per Broker Regulations requirements
  • Compliance with all applicable SEBI circulars on F&O segment operations
  • Adherence to client documentation and verification requirements under investor protection guidelines
  • Full compliance with exchange-specific circulars (NSE, MCX, NCDEX) on inspection and operational requirements
  • Proper implementation of risk management and client margin collection procedures

Important Dates

  • August 4-10, 2023: Inspection period
  • September 4, 2023: Inspection findings communicated to Noticee
  • September 13, 2023: Noticee submitted response to inspection findings
  • March 19, 2024: Adjudicating Officer appointed

Impact Assessment

Entity-Specific Impact: This adjudication order specifically targets Nuvama Wealth and Investment Limited for operational and compliance deficiencies identified during SEBI inspection. The proceedings under Section 15HB of SEBI Act may result in monetary penalties.

Industry-Wide Implications: The order reinforces SEBI’s focus on strict compliance with broker regulations, particularly in F&O segments and client documentation requirements. Stock brokers should ensure comprehensive adherence to all applicable SEBI and exchange circulars to avoid similar enforcement actions.

Regulatory Enforcement: Demonstrates SEBI’s active inspection regime and willingness to initiate adjudication proceedings for violations of broker regulations, reinforcing the importance of maintaining proper books of accounts and operational compliance standards.

Impact Justification

Adjudication order against registered stock broker for multiple regulatory violations including F&O segment compliance, client documentation, and broker regulations. Impact limited to specific entity but indicates regulatory enforcement standards.