Karvy Stock Broking's certificate of registration cancelled by Sebi due to violating regulations

Sebi, the capital market regulator, has cancelled the certificate of registration of the brokerage firm - Karvy Stock Broking (KSBL) through an order issued on May 31.

On April 28, 2023, through an order the Securities and Exchange Board of India (Sebi) barred the company and its promoters from the market for seven years. This step was taken due to various violations done by the company which includes misappropriation of clients’ securities and diverting the proceeds from pledging them to the stock broker’s associate companies. Meanwhile, it had also been investigating if the violations by Karvy Stock Broking warranted a suspension or cancellation of the Certification of Registration.

KSBL will continue to be liable for any pending dues.

“Irrespective of the cancellation of the Certificate of Registration, the Notice shall continue to be liable for anything done or omitted to be done as a Stock Broker and continue to be responsible for payment of outstanding fees and dues, if any, payable to SEBI,” the Sebi order stated.

“This Order shall come into force with immediate effect,” it added.

A show-cause notice post investigation into the latter was issued to the stock broker on May 27, 2022, and the broker had been asked to file a reply within 21 days of receipt.