Order in the matter of summary proceedings against the stock brokers who defaulted in payment of registration fees - Pee Dee Kapur Stock and Securities Ltd

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 proceedings against Pee Dee Kapur Stock and Securities Ltd. (SEBI Regn. No.INB231185134) (Kapur) who had allegedly defaulted in the payment of registration fees as a stock broker. The Officer, after taking into account the reply of Kapur, submitted the report dated December 8, 2009 recommending suspension of certificate of registration of Kapur for a period of six months or till such time outstanding registration fees is paid in full, whichever is later. I have considered the recommendation of the Officer and the material available on record. 2. I note that in terms of Regulation 6A (1), registration granted to a stock broker is subject to the condition that it pays the fees in the manner provided in the regulations. Regulation 10(1) of the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 (Regulations) requires a stock broker to pay fees as specified in Schedule III.

The Schedule III requires a stock broker to pay the fees computed with reference to annual turnover of the preceding financial year by first day of October. I note that Kapur failed to pay the fees as per Regulations by October for the preceding financial year. He did not pay subsequently despite follow up from SEBI. He did not pay even within 15 months which he had volunteered to vide his reply dated October 16, 2009 to the Officer conducting summary proceedings. Regulation 10(2) authorizes SEBI to suspend the registration of a stock broker who fails to pay the fees required under the Regulations. Under Regulation 27(vii), a stock broker is liable for actions, including suspension of registration, if it has failed to pay fees as per Schedule III. It is clear from the enquiry report and the records of SEBI that Kapur has not paid fees in accordance with the Regulations and no more fulfils the condition of registration, and is, therefore, liable for the actions 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that the SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 have since been repealed and replaced by the SEBI (Intermediaries) Regulations, 2008. 4. In the facts and circumstances of the case, I, 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 Pee Dee Kapur Stock and Securities Ltd. (SEBI Regn.

No.INB231185134) till the time the outstanding registration fees is paid in full. 5. A copy of this Order shall be served on the National Stock Exchange of India Limited of which Pee Dee Kapur Stock and Securities Ltd. 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: January 25, 2011 M. S. SAHOO PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA