Order in respect of M/s. SVS Securities Pvt. Ltd.

WTM/RKA/IVD-9/13 /2014 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA ORDER Under sections 11(4) and 11B of the Securities and Exchange Board of India Act, 1992 in respect of M/s. SVS Securities Pvt. Ltd. In the matter of M/s. Harita Seating Systems Ltd. Appearances: For Noticee: 1. Mr. J. J. Bhatt, Advocate 2. Mr. Sanjay Shah 3. Mr. Rajesh Shah For SEBI: 1. Mr. Santosh Kumar Shukla, Joint Legal Adviser 2. Mr. Santosh Kumar Sharma, General Manager 3. Mr. Deewan Samad, Assistant General Manager 4. Mr. Peeyush Gaurav Soni, Assistant Legal Adviser 1. Securities and Exchange Board of India (hereinafter referred to as "SEBI"), on the basis of the alerts generated at Bombay Stock Exchange Ltd. (hereinafter referred to as "BSE") and National Stock Exchange of India Ltd. (hereinafter referred to as "NSE") conducted an investigation into the trading in the scrip of M/s. Harita Seating Systems Ltd. (hereinafter referred to as "HSSL / Company") during the period from November 3, 2009 to March 31, 2010. ("the investigation period") to ascertain whether any provisions of the Securities and Exchange Board of India Act, 1992 ("SEBI Act") and the Rules and Regulations made there under have been violated. 2. During the investigation period, the shares of HSSL were listed on BSE, NSE, Bangalore Stock Exchange Ltd. and Madras Stock Exchange Ltd. The investigation, inter alia, revealed that Aquarian Share Broker Co Pvt. Ltd. ("Aquarian"), a sub-broker affiliated with SVS Securities Pvt. Ltd (hereinafter referred to as the "Noticee / SVS"), executed all the trades in the scrip of HSSL on behalf of Noticee's clients on BSE and NSE during the investigation period. It was alleged that the Noticee allowed Aquarian to execute cross deals and synchronized deals on behalf of certain related entities which resulted in creation of artificial volume in the scrip of HSSL and also increased the price of the scrip. Order in the matter of M/s. SVS Securities Pvt. Ltd.

3. After completion of the investigation, a Show Cause Notice ("SCN") dated August 18, 2013 was issued to the Noticee calling upon it to show cause as to why appropriate directions under sections 11(4) and 11B of the SEBI Act including restraining it from accessing the securities market and prohibiting it from buying, selling or otherwise dealing in securities, for an appropriate period of time, should not be issued. It was alleged in the SCN that the Noticee violated clause A(2) of the Code of Conduct for Stock Brokers specified under schedule II read with regulation 7 of SEBI (Stock Brokers and Sub brokers) Regulations, 1992 (hereinafter referred to as "the Stock Brokers Regulations"). The findings of the investigation that were incorporated in the SCN are summarized as follows: Trades at BSE during investigation period in the scrip of HSSL (a) During investigation period, the scrip was being traded in the trade-for-trade segment (T group) at BSE. The Noticee, along with another trading member namely, Pune E- Stock Broking Pvt. Ltd., executed trades for 5,36,223 shares accounting for 68.55% of the total volume traded (in the buy side) and also executed trades for 4,68,538 shares accounting for 59.90% of the total volume traded (in the sell side).

The Noticee purchased 3,84,823 shares (49.20% of the total market volume during the investigation period) and sold 3,17,138 shares (40.54% of the total market volume during the investigation period) on behalf of 71 clients. (b) While dealing for these 71 clients, the Noticee executed 268 cross deals for 2,78,836 shares (35.64% of the total market volume during the investigation period). Further, in 118 out of these 268 cross deals for 1,82,991 shares (23.39% of the total traded volume during the investigation period), the buy and sell orders were found to have been placed within a time difference of less than or equal to one minute. Out of the said 118 cross deals, in 61 cross deals for 1,22,864 shares (15.70% of the total traded volume during the investigation period), the buy and sell orders were placed at the same time. (c) It was observed that out of the aforesaid cross deals, the Noticee purchased 3,54,742 shares (45.35% of the total volume during the investigation period) and sold 2,95,315 shares (37.74% of the total volume during the investigation period) on behalf of a group of 14 clients (i.e.

Priya Dhaval Thakkar, Nitesh Arjun Thakkar, Amita Nitesh Thakkar, Yogeshkumar Rasiklal Doshi, Nitesh Arjun Thakkar HUF, Madhukanta Dhanvantrai Mehta, Dhaval Arjun Thakkar, Fenil Nitesh Thakkar, Yogesh R Doshi HUF, Mahesh Dhanvantrai Mehta, Nikunj Dhanvantrai Mehta, Sanjeev Vadilal Shah, Mitali Yogesh Doshi and Darshana Yogesh Doshi). The trades accounting for 70.86% of all the buy trades executed by Noticee and 85.12% of all the sell trades executed by it were on behalf of these 14 clients.

(d) It was also observed that out of 110 such trades entered into by these 14 clients, in 69 trades accounting for 1,82,747 shares (23.36% of the total volume traded during the investigation period), the buy and sell orders were placed within a time difference of less than one minute out of which the buy and sell orders were placed at the same time in respect of 46 trades accounting for 1,20,091 shares. Trades at NSE during investigation period in the scrip of HSSL (e) The Noticee purchased 3,69,974 shares i.e. 76.92% of the total volume traded (in the buy side) and sold 3,48,143 shares i.e. 72.38% of the total volume traded (in the sell side) at NSE .On behalf of 58 clients, the Noticee executed 622 cross deals for 3,17,253 shares (65.95% of the total market volume during the investigation period). Out of these 622 cross deals, in 202 trades for 2,41,715 shares (50.25% of the total volume traded during the investigation period), the buy and sell orders were placed within a time difference of less than or equal to one minute. Out of these 202 cross deals, in 98 cross deals for 1,94,405 shares (40.41% of the total volume traded during the investigation period), the buy and sell orders were placed at the same time.

(f) It was observed that out of the aforesaid trades on NSE, on behalf of a group of 16 clients (i.e. Priya Dhaval Thakkar, Yogesh Rasiklal Doshi, Mahesh Dhanvantrai Mehta, Nikunj Dhanvantrai Mehta, Dhaval Arjun Thakkar, Amita Nitesh Thakkar, Madhukanta Dhanvantrai Mehta, Nitesh Arjun Thakkar, Nitesh Arjun Thakkar(HUF), Fenil Nitesh Thakkar, Darshana Yogesh Doshi, Yogesh R Doshi HUF, Mitali Yogesh Doshi, Shruti Sanjeev Shah, Sanjeev Vadilal Shah and Rajeev Vadilal Shah), the Noticee purchased 3,48,687 shares and sold 3,35,320 shares accounting to 72.49% and 69.71% of the total purchase and sale volume, respectively during the investigation period. (g) Trades for 2,93,820 shares (60.08% of the total volume during the investigation period) accounting for 84.26% of the total purchases of the group and 87.62% of the total sales of the group were executed within the group of these 16 clients. Further, it was observed that out of the 282 trades entered into by these 16 clients, for 134 trades accounting for 2,31,142 shares (48.05% of the total volume), the buy and sell orders were placed within a time difference of less than one minute out of which, the buy and sell orders were placed at the same time in respect of 76 cross deals among these clients accounting for 1,89,549 shares.

(h) It was observed that Aquarian, through the Noticee, dealt majorly on behalf of the above-mentioned group of 14 connected/related clients on BSE and for the above-mentioned group of 16 connected/related clients on NSE. The 14 clients in these two groups were common. It was observed that family members of Mr. Yogesh R Doshi (director of Aquarian) formed part of the 16 member group. Mr. Yogesh R Doshi introduced 15 of the said 16 clients while one client was introduced by Mr. Ballabh Bagri, another director of Aquarian. (i) It was alleged that there was no effective change in the beneficial ownership in respect of the cross deals and synchronized deals executed between the above-mentioned groups of connected / related entities. The Noticee facilitated the execution of trades that were fraudulent in nature and the above acts on part of the Noticee were instrumental in execution of such trades through Aquarian that were instrumental in creating artificial volume and price rise in the scrip of HSSL which in turn distorted market equilibrium. (j) In view of the above, it was alleged that the Noticee, being a stock broker failed in exercising due skill, care and diligence in the conduct of its business.

4. The Noticee vide its letter dated October 30, 2013 filed its reply to the SCN. The Noticee was also granted an opportunity of personal hearing before me on December 17, 2013 when its authorized representatives appeared and made submissions in line with the Noticee's reply to the SCN. Vide letter dated December 23, 2013, the Noticee filed additional written submissions. The replies/submissions of the Noticee are, inter alia, as follows: a) The sub-broker, Aquarian has been associated with the Noticee for 8 years and has approximately 900 clients. During the investigation period, out of these 900 clients, 70 clients traded in the scrip of HSSL on BSE and 58 clients traded on NSE. Out of these clients trading of 14 and 16 clients on BSE and NSE, respectively has been found objectionable in the SCN. b) The Noticee is a professionally managed company and it had not done proprietary trading of even a single share. It also did not derive any extra gain out of the transactions done by its sub broker for the said clients. c) The impugned transactions in the scrip were done by Aquarian on behalf of existing retail investors who carried out trades in other scrips also at the relevant time.

The Noticee had taken KYC forms, executed the necessary client-member agreements and applied normal risk containment measures with regard to all its clients. None of the clients of the Noticee appeared in the list of debarred entities whose names are published on websites such as www.watchoutinvestors.com. d) The impugned trades were delivery based, intra-day and square off in nature. The clients always honoured their obligations. The clients have also stayed invested and even as on the date of the reply they were holding the shares of HSSL. The clients carried out their trades within price circuit limits. There was no off-market trading in the scrip by those clients. As per Noticee's standard operating procedure, the transactions were within risk parameters. Therefore, there was no reason for the noticee to suspect anything wrong in those trades of the clients. The style and pattern of trading of these clients trading through Aquarian also did not raise any suspicion. e) The Noticee did not fund trades of those clients nor did it receive any payment from any third party. f) The Noticee allowed its sub-broker Aquarian to execute clients' orders in the normal, natural and ordinary course of business on BSE/ NSE.

There was no motive to allow the sub-broker to do the alleged kind of trading. It was not aware if the clients and/or the sub-broker had any intention to do any undesirable activity. The sub-broker, Aquarian being an independent SEBI registered entity under Stock Brokers Regulations is also bound by code of conduct for sub-brokers. g) The allegation of allowing the sub-broker to deal on behalf of a group of related clients is completely general and totally lacking in any particulars whatsoever. SCN does not clearly state as to how all those clients were connected/related. The connection/ relation of Noticee with its clients are not even alleged in the SCN. Further, there is no material to show that the Noticee allowed the sub-broker to indulge in cross deals, synchronized deals, etc. Even the preponderance of probability does not show any connivance or collusion of the Noticee in the matter and there is not even such allegation in the SCN. h) The trading and matching systems of orders on BSE's BOLT and NSE's NEAT are anonymous and the algorithm is not known to anyone. The Noticee did not know the names of the counter party brokers and ultimate clients.

The Noticee did not have any connection with any client in the matter of dealings in the scrip of HSSL. i) Matching of orders keyed-in is done by an anonymous computerized system, and just because the orders get matched within a few seconds should not by itself indicate a fraudulent intent. The Noticee had no manipulative intent or contemporaneous knowledge about any purported artificial volume in the scrip or alleged distortion of market equilibrium by its sub-broker. Even the SCN has not found the any manipulative or fraudulent role of the Noticee in the impugned transactions. There is also no charge against the Noticee for aiding and abetting the sub-broker or clients. j) The allegations in the SCN have been made without considering the fact that the violation of code of conduct cannot be independent and de hors first recording violation qua the transactions. If the alleged trades were not in violation of any Rule / Regulation / Guidance, then the finding of violation of code of conduct alone is misconceived. k) The cross deals ,alleged in the SCN, are spread over a period of six months wherein the sub-broker as per his explanation has facilitated the entry / exit of clients at various price points.

It cannot be concluded that the alleged cross deals spread over a period of six months between clients, conducted by the sub-broker in fundamentally sound scrip, which had no adverse impact on the market or its participants, are per se fraudulent transactions. l) Analysis on price rise and fall given in the SCN is factually incorrect. The SCN does not correlate the increase/decrease in the price of the scrip with the increase/decrease in BSE sensex / BSE Auto-Index. HSSL is a reputed company and is a part of the TVS group. The trading was justified by the fundamentals of the company. m) The scrip of HSSL is an illiquid scrip wherein the average daily volumes are very small. This kind of illiquid scrip with sound fundamentals needs to be separated from the other 'Z' group scrips which lack in any fundamentals. The due diligence approach to the trades taking place in this kind of scrip also has to be taken separately. n) As part of the due diligence at the relevant time, written explanation was sought from the sub-broker and the same was submitted to the first level regulator i.e. NSE.

The said explanation stated that the main reason for the alleged cross deals was to provide entry / exit opportunities for clients at various price points as it was illiquid scrip. The said cross deals were not undertaken with a view to induce anyone to participate in the trading of the scrip. This scrip was identified by the sub-broker as a fundamentally sound investment to be held over a long period of time. In the event, if somebody wanted to exit after some time, the sub-broker has only facilitated the same by finding the buyer for the seller. Considering the soundness of the scrip and other parameters, even the first level regulator i.e. NSE found the explanation to be satisfactory and closed the alert generated and the same procedure was followed by the Noticee. o) The Noticee was convinced with the explanation submitted by Aquarian wherein it had mentioned that the price rise in the scrip of HSSL was comparatively less than scrips such as Tata Motors, Kennametal, Pricol, etc. and also stated that the price rise in the scrip of HSSL was justified in terms of the turnaround in the performance of the company and the corporate actions. p) The sub-broker had further explained that it had advised all its clients to remain invested in the scrip for as long as possible as the fundamentals of the company continue to remain sound and the Noticee had, as part of the due diligence, also considered the same. q) The Noticee relied on the enhanced surveillance mechanisms of the regulators and the explanations provided by the sub-broker and had conducted various layers of due diligence. r) BSE and NSE did not annul the trades nor did they expunge the share price of the scrip of HSSL at the relevant time.

NSE had enquired about the impugned trades of the sub -broker. It was satisfied with the response /explanation of the sub-broker and therefore, it did not take any action. BSE did not even enquire about those trades as being objectionable. Thus, the first level regulators, namely, BSE and NSE did not find any wrong on Noticee's part and were satisfied with the level of due diligence and precautions taken by it for discharging its normal duties as a stock broker. s) Two sequential but different proceedings have been initiated against the Noticee with regard to the same transactions and allegations i.e., the present proceedings and the proceedings under the SEBI (Intermediaries) Regulations, 2008. In the facts and circumstances of this case these proceedings are not necessary and no action as contemplated in the SCN should be taken. t) The Noticee had acted legally, bona fide and as per the Rules and Regulations of BSE / NSE and SEBI. There is no complaint / arbitration involving the Noticee by any market participant in the scrip of HSSL at the relevant time or even till date. Since the role of the Noticee is not established in any way in the transactions, the allegation of violation of clause A(2) of Code of Conduct as an independent charge should not stand in view of the facts and circumstances submitted by the Noticee.

5. I have considered the SCN and the reply / written submissions and oral submissions made by the Noticee and other relevant material available on record. It is noted that Aquarian, a sub-broker affiliated to the Noticee had substantially traded in the scrip of HSSL during the investigation period. Its trades through the Noticee, during investigation period, accounted for majority of the trades for 71 clients on BSE and for 58 clients on NSE as described hereunder:-

Shares Purchased Shares sold On BSE for 71 clients Number of % with total market Number of shares % with total shares Volume market Volume 3,84,823 49.20% 3,17,138 40.54% On NSE for 58 clients 3,69,974 76.92% 3,48,143 72.38%

6. Aquarian executed cross deals and other transactions that were synchronized with regard to time of placement of orders in the scrip of HSSL on BSE and NSE on behalf of 14 and 16 of its clients, respectively who were connected /related with each other. It has been alleged in the SCN that there was no effective change in the beneficial ownership in respect of the shares traded between the said groups of connected / related entities and these transactions were allegedly instrumental in creation of artificial volume and price rise in the scrip of HSSL. It is on this basis that the Noticee has been charged that it, being a stock broker, failed in exercising due skill, care and diligence in the conduct of its business and contravened clause A(2) of the Code of Conduct for stock brokers specified under schedule II read with regulation 7 of the Stock Brokers Regulations. The said provisions are reproduced as under- Stock Brokers Regulations. "7. The stock broker holding a certificate shall at all times abide by the Code of Conduct as specified in Schedule II." Code of Conduct for Stock Brokers "A. General. (1) ………………………………………………………………………. (2) Exercise of due skill and care: A stock-broker shall act with due skill, care and diligence in the conduct of all his business."

7. The Noticee has contended that the allegation regarding relationship of the clients is general in nature. In this regard, I note that the group of 14 clients which traded on BSE was a part of the group of 16 clients who traded on NSE. The director of Aquarian, Mr. Yogesh R Doshi was himself a part of these groups and also introduced the other clients to the Noticee. Further, the family members of Mr. Doshi were also part of the two groups of clients. In my view, these clients are connected/related on the basis of these facts. I, therefore, do not find merit in this contention of the Noticee. 8. The Noticee has contended that it had no contemporaneous knowledge about any purported artificial volume in the scrip or alleged distortion of market equilibrium by its sub-broker. Further, it had no manipulative intent or motive to carry out the transactions nor did it fund any of the transactions. In this regard, I note that the charge against the Noticee is not about manipulative or fraudulent transactions by it. The charge against the Noticee is that it failed to exercise due skill, care and diligence while the trades in the scrip of HSSL were being executed through it by Aquarian.

I, therefore, find this contention of the Noticee as unfounded. 9. In order to deal with this charge against the Noticee, it is necessary to examine whether under the facts and circumstances of the case, the Noticee failed to exercise due care, skill and diligence. This issue can be determined on examination of the facts and circumstances of the case. The details of impugned trades of Aquarian for 14 and 16 of its clients on BSE and NSE, respectively are as following: a) Aquarian traded for 14 clients on BSE, for total 2,51,376 shares (32.13% of the total traded volume during the investigation period) out of which the buy trades accounted for 70.86% of the total buy volume and the sell trades accounted for 85.12% of the total volume of all the sell trades executed by Aquarian through the Noticee. b) Out of the 110 trades entered into by Aquarian for these 14 clients, for 69 trades accounting for 1,82,747 shares (23.36% of the total volume during the investigation period) the buy and sell orders were placed within a time difference of less than one minute. c) Aquarian executed 46 cross deals (wherein the Noticee was both buying as well as the selling broker ) among these 14 clients accounting for 1,20,091 shares (15.35% of the total volume traded during the investigation period).

In these cross deals the buy and sell orders were placed at the same time. d) On NSE, within the group of 16 connected clients, trades for 2,93,820 shares (60.08% of the total volume during the investigation period) accounting for 84.26% of the total buy volume of the group and 87.62% of the total sale volume of the group were executed by Aquarian through the Noticee. e) Out of the 282 trades entered into by these 16 clients, for 134 trades accounting for 2,31,142 shares (48.05% of the total volume) the buy and sell orders were placed within a time difference of less than one minute. f) Further, for 76 cross deals among these 16 clients accounting for 1,89,549 shares (39.40% of the total volume), wherein the buy and sell orders were placed at the same time. 10. From the above details, I find that Aquarian trading for the connected/related clients had traded substantially in the scrip of HSSL through synchronized and cross deals. Noticee has contended that the trading and matching systems of orders on BSE's BOLT and NSE's NEAT are anonymous and the algorithm is not known to anyone because of which, the Noticee did not know the names of the counter party brokers and ultimate clients.

In this regard, I find that the argument of the Noticee is without any merit as large number of cross-cum-synchronized deals for connected clients were executed by Aquarian through the Noticee wherein the Noticee was acting as a stock broker on both (buy and sell) sides. 11. It is settled position that synchronized and cross deals are per se not illegal. However, any attempt to manipulate the price or volume through pre-meditated and coordinated trading between transacting parties through such trades would be illegal being covered under the prohibitions contained under the SEBI Act and the PFUTP Regulations. In this case, the shares were transacted and circulated among the connected/related entities. The director of Aquarian and his HUF were also part of the league of the connected / related clients. Its director Mr. Yogesh R. Doshi himself being the transacting party had introduced other clients to Aquarian. From these facts and circumstances coupled with the pattern of synchronized and cross deals in an illiquid scrip like HSSL it can be inferred that Aquarian and its said connected/related clients were acting in a league under a premeditated manipulative plan without intending to transfer the beneficial ownership of shares traded.

12. The Noticee has also contended that the allegations in the SCN have been made without considering the fact that the violation of code of conduct cannot be independent and de hors first recording violation qua the transactions. I note from the SCN that it also alleges that execution of impugned trades through the Noticee and its sub-broker were not only instrumental in creating artificial volume and price rise in the scrip which in turn distorted market equilibrium but also facilitated the execution of trades found to be fraudulent in nature. I, therefore, reject this contention of the Noticee. 13. Coming to the issue as to whether the Noticee failed to exercise due skill, care and diligence with regard to the impugned transactions of Aquarian, I note that the Noticee has contended that there was no reason for it to suspect anything wrong in the trades of the clients executed by Aquarian as the trades were executed in the ordinary course of business. Further, it had no contemporaneous knowledge about any purported artificial volume in the scrip or alleged distortion of market equilibrium by its sub-broker.

14. I note that it is established position that the stock broker is not only expected to protect the interest of its clients and sub-brokers, but also expected to protect the interests of the securities markets in which he operates. (Madhukar Sheth Vs SEBI [SAT order dated 18.09.2003]. I further note that this obligation of the stock broker is not a onetime measure. Rather, it is a continuing exercise expected from a stock broker to take appropriate decisions on the basis of ongoing developments and he cannot be complacent. The sub-broker being the agent of the stock broker, the latter must exercise due skill, care and diligence when the sub-broker places large synchronized and cross transactions through it repeatedly. 15. It is to be kept in mind that the scrip in question was an illiquid one and during the investigation period, there was an abnormal rise in the volumes in the scrip of HSSL without there being any positive news about HSSL in the public domain. Aquarian was the only sub-broker of the Noticee which had traded in the scrip of HSSL for the connected/related clients through the Noticee.

Aquarian executed large number of trades in the illiquid scrip of HSSL. I find that such large volumes in an illiquid scrip being generated by only one sub-broker cannot go unnoticed and should have alerted any prudent stock broker. I also note that the large number of repeated and continuous cross deals and synchronized deals were executed through the Noticee by its sub-broker Aquarian for the connected/related clients including the director of Aquarian and his HUF. In my view, these facts and circumstances were sufficient to alert any professional stock broker of reasonable prudence. It is inconceivable that the Noticee could not notice the abnormality in the trading in the scrip of HSSL when such a large number of cross deals and synchronized deals were being executed through it in the illiquid scrip of HSSL. It is also noted that the cross deals, wherein the Noticee was buying as well as selling broker for the transacting connected parties, were also matched in a synchronized manner. In this regard, I note that, in the case of GIR Marketing & Trading Co. Pvt. Ltd. vs. SEBI (Appeal no. 113 of 2011, Order decided on August 5, 2011) Hon'ble Securities Appellate Tribunal has held that: “cross deals per se are not illegal but the common broker executing the buy and sell orders is not expected to match those orders by putting in orders for the same quantity, at the same price and at the same time”.

16. In the facts and circumstances of this case as discussed hereinabove, I am of the view that when Aquarian was placing repeated synchronized and cross transactions in an illiquid scrip for the connected/related clients through the Noticee, the Noticee, being a professional stock broker, should have suspected that the price and volume in the scrip was being manipulated. It cannot be accepted that the Noticee did not become suspicious when its sub-broker was placing those orders. 17. Apart from the above, I also note that in terms of regulation 2(gc) of the Stock Broker Regulations a sub-broker means "any person not being a member of stock exchange who acts on behalf of a stock broker as an agent or otherwise for assisting the investors in buying, selling or dealing in securities through such stock brokers". Thus, the sub-broker is an agent of the Stock Broker and being the principal the Stock Broker is responsible for all the acts and omissions of his agent i.e. the sub-broker. I note that Hon'ble SAT in the case of Kishor R. Ajmera v. Securities And Exchange Board Of India (order dated February 5, 2008) has also held that a broker can be held responsible for the wrongdoings of its sub-broker since the latter is an agent of the broker. The Hon'ble Tribunal observed as under: "It is by now well settled that a sub-broker is an agent of the broker. In other words, the firm was the agent of the appellant and since it had executed the trades in question on behalf of the appellant, the latter could be held responsible for the acts of the firm provided that it was alleged and established that the firm as a sub-broker had done something wrong." 18. I, therefore, find that the Noticee has failed to exercise due skill care and diligence in respect of the transactions executed by its sub-broker, Aquarian through the Noticee on behalf of connected/related clients and has, therefore, violated clause A(2) of the Code of Conduct for Stock Brokers specified under schedule II read with regulation 7 of the Stock Brokers Regulations.

19. In this case, the charge against the Noticee is with regard to failure to discharge due skill, care and diligence in its stock broking business and the Noticee has not been found to be actively involved in the alleged price and volume manipulation. Considering the facts and circumstances of this case and the mitigating factors thereof, I, in order to protect the interest of investors and the integrity of the securities market, in exercise of the powers conferred upon me by virtue of section 19 read with sections 11 and 11B of the SEBI Act hereby restrain SVS Securities Pvt. Ltd. from accessing the securities market and also prohibit it from buying, selling, and otherwise dealing in securities market, directly or indirectly, in any manner whatsoever, for a period of one year from the date of coming into effect of this order. 20. This order shall come into force immediately on expiry of twenty one days from the date of this order. 21. A copy of this order shall be served upon SVS Securities Pvt. Ltd., BSE, NSE and the depositories for ensuring compliance of this Order.

DATE: March 27th, 2014 RAJEEV KUMAR AGARWAL PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA