SEBI Imposed a Penalty of ₹7 Lakh on Reliance Securities for Non-Compliance

On Monday, April 7, 2025, the capital markets regulator SEBI imposed a ₹7 lakh fine on Reliance Securities for failing to comply with stockbroker regulations. As per an SEBI order, the penalty must be paid within 45 days.

Investigation by SEBI

This action follows an inspection conducted by SEBI from December 22, 2022, to January 24, 2023, to assess whether Reliance Securities, a registered stockbroker, was adhering to stockbroking standards.

During its investigation, SEBI discovered that Reliance Securities had provided inaccurate details in daily margin statements to clients on three occasions. Additionally, there was a mistake in the ledger balance on one occasion.

SEBI’s Findings

SEBI also found that the firm had not complied with risk-based supervision (RBS) guidelines, as it failed to report cash collateral data in the RBS data submissions. The RBS data submitted by Reliance Securities inaccurately reflected the total available funds. Specifically, the firm reported ₹16.13 crore for funds held in client bank accounts and with clearing members/clearing corporations, but it had omitted ₹312.57 crore in funds available with clearing members/clearing corporations.

The regulator further noted that Reliance Securities had passed upfront penalties onto some clients on multiple occasions, a violation of the rule that prohibits passing penalties for the short collection of upfront margins under any circumstances.

Regarding cybersecurity, SEBI cited adverse audit findings for three periods. Reliance Securities failed to confirm product testing before use and did not designate a cybersecurity officer as required. The audit reports for the periods of April 2021–September 2021, October 2021–March 2022, and April 2022–September 2022 each included negative observations. As a result of these violations, SEBI imposed the ₹7 lakh fine on Reliance Securities.

About Reliance Securities

Reliance Securities is the broking & distribution arm of Reliance Capital. The company provides customers with access to equities, derivatives, currency, IPOs, mutual funds, bonds, and corporate FDs, amongst others.

Conclusion

SEBI’s action against Reliance Securities underscores the importance of strict adherence to regulatory norms and guidelines in the stockbroking industry. The penalty highlights the regulator’s commitment to maintaining transparency, ensuring accurate reporting, and safeguarding client interests.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

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