IIFL Securities Ltd shares soared up to 14% to hit a fresh 52-week high on Friday, December 8, after the Securities Appellate Tribunal (SAT) set aside an order banning the company from onboarding new clients for two years.
IIFL Securities shares opened higher and rallied as much as 13.89% to hit a year high of ₹134.4 on BSE after the SAT order.
The financial and brokerage services provider on Thursday informed bourses that the SAT has set aside the SEBI order dated June 19, 2023, that prohibited IIFL Securities from onboarding new clients for two years in respect of its business as a stock broker.
The appellate tribunal also reduced the penalty to ₹20 lakh on the stock broking company.
The Securities Exchange Board of India (SEBI) in June banned IIFL Securities from onboarding new clients for a period of two years for alleged mis-utilisation of client funds.
The SAT observed that there was no misuse of client funds. The tribunal also held that by wrongly considering the non-funded portion of the bank guarantee as per the 2016 circular, an attempt was made out to show that there was a misuse of client funds.
SAT also held that there was no reason to initiate two separate proceedings for the same cause of action by bifurcating the period.
“The Company further clarifies that the issue pertaining to nomenclature of the client accounts has been rectified and the Company is compliant with the applicable Regulations/Circulars,” IIFL Securities said in a filing.
IIFL Securities offers broking services, financial products distribution, institutional research and investment banking services.
Shares of IIFL Securities were trading 8.6% higher at ₹128.15 apiece on BSE at 9.33 AM.
