Hyderabad, Nov 25: The Karvy Group here on Saturday clarified that there was no instance where there has been mis-utilisation of client securities.
In a statement while reacting to various media reports in the wake of the SEBI’s order on Friday barring Karvy Stock Broking from acquiring new customers in wake of alleged ‘defaults’ to clients, Karvy said that SEBI has restricted us only from acquiring new customers until the matter is resolved. They have given us 21- days to give a comprehensive response to their prima facie findings, and issued an interim order.
Most media have reported that we have been banned from trading, but there is ‘ NO BAN’ at all whatsoever, except a restriction on onboarding new customers for a twenty-one day period, it also clarified and said this is completely false and we will continue to service all our existing customers uninterruptedly.
A recent routine inspection in August 2019 was carried out by SEBI, the Exchanges and the depositories, the Karvy said that upon submission of the preliminary inspection report by NSE to SEBI, the regulator issued an ex-parte ad-interim order on Friday issuing directives in investor interest.
The nature of this order is such that by definition, it is an ‘interim’ directive and not a final finding. The order further gives us the right to respond to each and every preliminary observation within a period of 21-days and is thus only a temporary order restraining some actions till December 16, 2019 when we will represent our position to SEBI, it said
We will be providing a detailed explanation and clarifications to SEBI as required. “There is no instance where there has been mis-utilization of client securities”, it clarified and claimed that we have a track record of resolving investor complaints, and while we acknowledge delays in handling and resolution of certain cases, to characterize it as misutilization is a travesty, .
We acknowledge that as per prior to SEBI directives we used to pledge shares from time to time in full compliance with the then directives as was the standard practice across broking houses, but following the issuance of fresh directives in 2018-2019, we have commenced the process of reducing the quantum, it also said. (UNI)