The government on Monday said Rs 414.24 crore has been paid to a total of 34,497 clients of Karvy Stock Broking Ltd (KSBL) from the National Stock Exchange's (NSE) investor protection fund till March 2023.
In addition, NSE along with other market infrastructure institutions (MIIs) have also monetised the mutual fund distribution business of KSBL, and funds amounting to Rs 150 crore have been realized and the same is being utilized for distribution to clients of KSBL, minister of state for finance Pankaj Chaudhary said in a written reply to Lok Sabha.
The case pertains to Karvy's unauthorisedly transferring securities of its clients in one of its demat accounts by misusing Power of Attorney (PoA) given to its clients.
NSE and BSE suspended the trading terminals of KSBL from December 2, 2019, and declared it a defaulter on November 23, 2020, for misusing clients' funds and securities.
Moreover, NSE has declared 32 stock brokers as defaulters in the past five years for failing to comply with the bourse's guidelines.
The minister said capital markets regulator Sebi, along with exchanges, conducts regular inspections of brokers based on certain criteria and takes action as per its regulations and bye-laws of the exchanges.
Under NSE guidelines, stock brokers are required to fulfill their obligations and should not involve in any misconduct, or unprofessional conduct among others.
"The claims of investors in the matter are being dealt with and settled by NSE as per its bye-laws. As on March 20, 2023, an amount of Rs 414.24 crore has been paid to 34,497 clients from the Investor Protection Fund (IPF) of NSE," Chaudhary said.
Also, the minister said securities worth around Rs 2,000 crore and belonging to 82,559 clients were transferred to fully paid-up clients of KSBL citing Sebi orders passed in November 2019 and November 2020.
Further, based on the findings of a forensic audit report and observations of NSE, Sebi initiated enforcement action against KSBL, its directors, CEO and against two group companies of KSBL under its relevant regulations.
First Published: Apr 3, 2023 10:51 PM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Kannauj Lok Sabha elections: Can ex-UP CM Akhilesh Yadav reclaim this erstwhile SP bastion?
May 12, 2024 11:32 PM
Khunti Lok Sabha Elections 2024: Arjun Munda and Kali Charan to lock horns in this clash of tribal leaders
May 12, 2024 8:59 PM
Malkajgiri Lok Sabha election: A three-way contest among turncoats
May 12, 2024 8:45 PM