Order in the matter of summary proceedings against Sareen Financial Ser (P) Ltd
- Order No.WTM/MSS/MIRSD/75/2010
Ratio decidendi
The rule this decision rests on
A stock broker's certificate of registration is granted subject to the condition that it pays its fees in the manner the Regulations prescribe. A broker that fails to pay registration fees as the Regulations require no longer fulfils the conditions of its registration and is thereby liable to action under Regulation 10(2) read with Regulation 27(vii). Part payment of outstanding fees made during the pendency of summary proceedings does not remove the default while a balance remains due, and the broker therefore continues to fail the condition of registration. Where the regulations under which the enquiry was initiated have been repealed and replaced, the power to act on the default is exercised under the replacing regulations, namely Regulation 33B(5) and (6) of the SEBI (Intermediaries) Regulations, 2008. A suspension of registration for non-payment of fees may be ordered to operate until the outstanding registration fees are paid in full.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
1. Vide 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 Sareen Financial Ser (P). Ltd. (SEBI Regn No. INB120756132) (Sareen) who had allegedly defaulted in the payment of registration fees. The Officer submitted his report recommending suspension of the certificate of registration for a period of six months or till such time the outstanding registration fees is paid in full, whichever is later.
2. I have considered the recommendation of the Officer. I note that during the currency of the summary proceeding, Sareen has paid Rs.2550 towards outstanding fees. Even after this payment, it owes Rs.10,094 to SEBI. In terms of Regulation 6A (1), registration granted to a stock broker is subject to condition that it pays the dues in the manner provided in the regulations. Under Regulation 27, a stock broker is liable for suspension or cancellation of its registration if it fails to pay fees as per Regulations. Since Spectrum has failed to pay the fees as per Regulations, it no more fulfils the conditions of registration and it is, therefore, liable for action, under Regulation 10(2) read with Regulation 27(vii). I, therefore, agree with the recommendation of the Officer.
3. I note that the SEBI (Procedure for Holding Enquiry by the 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 Sareen Financial Ser (P). Ltd. (SEBI Regn No. INB120756132) 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 Sareen 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 24, 2010 M. S. SAHOO PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA
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