Order in the matter of summary proceedings against M/s.Radhika Portfolio Ltd
- Order No.WTM/MSS/MIRSD/66/2010
Ratio decidendi
The rule this decision rests on
A stock broker's certificate of registration is liable to be cancelled where its membership of the stock exchange has been auctioned and it has failed to pay the registration fees, because it then no longer satisfies the conditions of registration under regulation 6A(1)(a) and (d) of the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992. Such a default also attracts action under regulation 27(i) and (vii) of those Regulations. The fact that the outstanding registration fees were subsequently paid by the stock exchange out of the auction proceeds does not, on the reasoning of the order, displace the conclusion that the registration conditions are no longer fulfilled. Where enquiry proceedings were initiated under regulations since repealed, the power to cancel registration may be exercised under section 19 of the SEBI Act, 1992, read with regulation 33B(5) and (6) of the SEBI (Intermediaries) Regulations, 2008, which replaced them.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
1. Vide an Order dated August 11, 2005 under Regulation 16(1) of the extant SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002, SEBI had appointed an Officer to conduct summary proceeding against M/s. Radhika Portfolio Ltd. (SEBI Registration no. INB120829338) (Radhika), who had defaulted in the payment of registration fees as a stock broker. 2. The Officer has submitted the report recommending cancellation of certificate of registration of Radhika since it has not paid the registration fees and its membership right has been auctioned by the stock exchange. 3. I have considered the recommendation of the Officer. I note that the membership right of Radhika has been auctioned by the stock exchange. It has also failed to pay the registration fees, though the outstanding registration fees have now been paid by the stock exchange out of the auction proceeds. Therefore, Radhika is liable for actions under regulation 27 (i) and (vii) of the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992. 4. Further, in terms of regulation 6A (1) (a) and (d) of the SEBI (Stock Brokers and Sub- Brokers Regulations), 1992, registration granted to a stock broker is subject to conditions that it holds the membership of the stock exchange and pays the registration fees in the manner provided in the regulations. Since Radhika no longer fulfils these conditions, its certificate of registration is liable to be cancelled. 5. I note that the SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 have since been repealed and replaced by the SEBI (Intermediaries) Regulations, 2008. 6. I, therefore, in exercise of the powers conferred upon me under Section 19 of the SEBI Act, 1992 read with Regulation 33B (5) and (6) of the SEBI (Intermediaries) Regulations, 2008, hereby cancel the certificate of registration of M/s. Radhika Portfolio Ltd. (SEBI Registration No. INB120829338).
7. A copy of this Order shall be served on Ludhiana Stock Exchange of which Radhika was a member for necessary action. 8. This Order shall come into force on the expiry of 21 days from the date of this Order.
DATE: September 09, 2010 M. S. SAHOO PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA
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