The Securities and Exchange Board of India on Monday imposed a penalty of Rs 6 lakh on Anand Rathi Share and Stock Brokers Ltd for unauthorised trading activities.
In an order passed by SEBI, the capital market regulator alleged that the broking firm had violated SEBI's code of conduct for stockbrokers and sub-brokers by allowing unauthorised and illegal trading practices on its terminal at Ahmedabad.
The broking firm, which is a Bombay Stock Exchange (BSE) member, has been accused of maintaining an unauthorised terminal at Ahmedabad and allowing a sub-broker, Mr Bhadresh Sanghvi, to trade from that particular location. The order further states that Mr Sanghavi, the proprietor of Arihant Investment and unauthorised to trade on the terminal, carried out illegal/dabba trading.
Dabba trading refers to a trading practice where the investor's trade is not reflected on the stock exchanges, but only in the dabba trader's books.
The investigation into the irregularities in trading platform was conducted after SEBI received a complaint against the same in 2009.
The penalty is to be paid by the broking firm within 45 days of the order being passed, stated the filing on the SEBI Web site.