Order in the matter of summary proceedings against Majestic Financial Services Ltd
- Order No.WTM/MSS/MIRSD/73/2010
Ratio decidendi
The rule this decision rests on
A stock broker that fails to pay the fees required under the Regulations no longer satisfies the condition on which its registration is granted, because registration is made subject to payment of fees. That failure exposes it to suspension of its registration under Regulation 10(2), read with Regulation 27(vii). Where the earlier enquiry Regulations have been repealed and replaced, SEBI may proceed by summary action and suspend registration under the replacement Regulations, here Regulation 33B(5) and (6) of the SEBI (Intermediaries) Regulations, 2008, exercised under section 19 of the SEBI Act, 1992.
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 Majestic Financial Services Ltd. (SEBI Regn. No. INB120829230) (Majestic) who had defaulted in the payment of registration fees. The Officer submitted the report recommending suspension of the certificate of registration for a period of six months or till the time outstanding registration fees are paid in full.
2. I have considered the recommendation of the Officer and agree with the same. Regulation 10(2) authorizes SEBI to suspend the registration of a stock broker who fails to pay the fees required under the Regulations. In terms of Regulation 6A (1), registration granted to a stock broker is subject to condition that it pays the fees in the manner provided in the regulations. Since Majestic has failed to pay the fees, it no more fulfils the condition of registration and it is, therefore, liable for the action under Regulation 10(2) read with Regulation 27(vii).
3. 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that the SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 have since been repealed and replaced by the SEBI (Intermediaries) Regulations, 2008.
4. 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 suspend the certificate of registration of Majestic Financial Services Ltd. (SEBI Regn. No. INB120829230) till the time outstanding registration fees is paid in full.
5. A copy of this Order shall be served on the Ludhiana Stock Exchange of which Majestic is a member for necessary action.
6. This order shall come into force on the expiry of 21 days from the date of this Order.
DATE : September 21, 2010 M. S. SAHOO PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA
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