Capital market regulator Securities and Exchange Board of India (SEBI) has cancelled the registration of stockbroker Ficus Securities for mis-managing clients' funds and securities. The stockbroker flouted regulatory norms during the period April 2015 to January 2018, SEBI said in its order. On multiple occasions, Ficus Securities used its clients' securities for settlement of its own pay-in obligations and has also transferred clients' securities to other entities or has pledged those securities to avail funds for itself, SEBI noted.
Further, clients' securities were not available with Ficus as it had pledged them to avail loans from financial institutions and, consequently, was not settling the accounts of its clients on a monthly or quarterly basis. It was noted that during the period of April 2015 till December 2016, Ficus transferred Rs48.28 crore to Ficus Commodities and received Rs48.94 crore during the said period from Ficus Commodities. This transaction was done at the same time when Ficus was not in a position to repay or settle funds due to its credit clients. The regulator found that Ficus used its connected entity, Ficus Commodities for diverting its clients' funds which resulted in the violation of stockbroker norms.
"Ficus has not only failed to fulfil its avowed duty towards its clients, be it redressing their grievances or settling the funds due to its clients, but has gone to the extent of misutilising its clients' funds and securities," SEBI's whole-time director SK Mohanty said.
Accordingly, the regulator has cancelled "the certificate of registration granted to Ficus Securities Pvt. Ltd" and the directive will come into force with immediate effect. It has been noted that Ficus Securities has been expelled from the exchanges—BSE, NSE and MSEI—since March 2018 by declaring it as a defaulter.
In the past few years, many brokers have been expelled from the markets. In several cases, brokers were said to have been luring clients with a promise of higher fixed return, only to dabble in the risky derivative segment and even diverted clients' money for other purposes.
In This GIFT City Story, One More Example of How IL&FS Used Its Partners & Made Them Scapegoats
30 September 2022
Now that the Gujarat International Finance Tec-City (GIFT City) is out of the shadows of the beleaguered Infrastructure Leasing and Financial Services (IL&FS), it is finally on its way to achieve a part of the promise showcased at...
Oracle India Paid US$400,000 to Railway Company Officials for a Contract in 2019: US SEC
Moneylife Digital Team
29 September 2022
Oracle Corporation paid a bribe of more than US$400,000 to officials from a company owned by the Indian ministry of railways in 2019, during the tenure of Union minister Piyush Goyal. This explosive detail is part of the settlement...
No Premature Closure of Senior Citizens' Savings Scheme Account on Death: Govt
29 September 2022
The finance ministry on Thursday clarified that premature closure of an account under the Senior Citizens' Savings Scheme (SCSS) does not get triggered due to the death of account-holder, but is applicable only when the account...
How To Tokenise Your Debit and Credit Cards
29 September 2022
With the Reserve Bank of India (RBI)'s deadline for card tokenisation ending on 30th September (unless it is extended again), many debit and credit card-holders are worried about making payments online after 1st October. As per...