Description
SEBI imposed penalty on Samdhyan Commodities Brokers Private Limited for violations related to unverified trading terminals at Authorized Person locations during inspection conducted on January 6, 2025.
Summary
SEBI issued Adjudication Order No. Order/SM/RG/2025-26/31944 against Samdhyan Commodities Brokers Private Limited (PAN: AAKCS0870P) under Section 15-I of the SEBI Act, 1992. The order follows an inspection conducted on January 6, 2025 jointly with Multi Commodity Exchange of India Ltd. (MCX) officials for the period April 1, 2023 to December 31, 2024. The broker was found in violation of SEBI Stock Brokers Regulations, 1992 and related circulars regarding terminal verification at Authorized Person locations.
Key Points
- Inspection conducted on January 6, 2025 at Samdhyan Commodities Brokers Private Limited by SEBI along with MCX officials
- Inspection covered period from April 1, 2023 to December 31, 2024
- Show Cause Notice issued on October 14, 2025 (SEBI/EAD-3/SM/RG/26694/1/2025)
- 7 CTCL (Computer-to-Computer Link) terminals registered at Authorized Person (Gyana Ranjan Parida) location were found connected and executing trades
- None of the terminals were physically present at the inspection location despite being connected and active
- Violations of Clause 6 of Annexure 1 of MCX Circular MCX/INSP/601/2019 dated October 22, 2019
- Violations of Chapter III, Para 32.7 of SEBI Master Circular for Stock Brokers (SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2024/53 dated August 9, 2024)
- Violations of Regulation 9(b) and Clause A(5) of Code of Conduct under Schedule II of SEBI Stock Brokers Regulations, 1992
Regulatory Changes
No new regulatory changes introduced. This order enforces existing regulations regarding:
- Physical verification requirements for trading terminals at Authorized Person locations
- Compliance with MCX terminal verification norms
- Stock broker code of conduct requirements
Compliance Requirements
- Stock brokers must ensure all registered CTCL terminals are physically present at declared Authorized Person locations
- Physical verification of terminals must be possible during inspections
- Trading terminals cannot be connected and executing trades from undisclosed or unverified locations
- Brokers must maintain accurate records of terminal locations and ensure compliance with exchange circulars on terminal verification
- Adherence to SEBI Master Circular requirements for terminal management and supervision
Important Dates
- Inspection Date: January 6, 2025
- Inspection Period Covered: April 1, 2023 to December 31, 2024
- Findings Communication: February 5, 2025
- Entity Reply: February 10, 2025
- Initial AO Appointment: July 14, 2025 (Shri Amar Navlani)
- Current AO Appointment: September 19, 2025 (due to transfer)
- Show Cause Notice: October 14, 2025
Impact Assessment
This adjudication order highlights SEBI’s focus on physical verification and location compliance for trading terminals. The case demonstrates regulatory enforcement against brokers who register terminals at specific Authorized Person locations but operate them elsewhere. The violation creates risks of:
- Unauthorized trading from unverified locations
- Lack of proper supervision of Authorized Persons
- Potential misuse of trading infrastructure
- Regulatory arbitrage and circumvention of location-based controls
The action serves as a warning to other stock and commodity brokers to ensure strict compliance with terminal registration and verification requirements. Brokers must implement robust systems to track and verify physical presence of all registered terminals at declared locations.
Impact Justification
Adjudication order against a commodity broker for terminal verification violations. Medium importance as it affects broker compliance standards but is entity-specific enforcement action.