Rationalization of imposition of fines for false/incorrect reporting of margins or non-reporting of margins by Trading Member/Clearing Member in all segments
In order to rationalize and bring uniformity in the manner of imposition of fine for ‘false/incorrect’ reporting of margin vis-à-vis ‘non-reporting’ of margin, following guidelines are issued: a. The Stock Exchanges and Clearing Corporations, in all segments, in consultation with one another, shall devise a standard framework for imposition of fine on the Trading Member/ Clearing Member for incorrect/false reporting and non-reporting of margin collected from the clients.
b. Considering the principle of ‘proportionality’, the fine shall be charged to the member based on the materiality of non-compliance done by the member which may include factors such as number of instances, repeated violations, etc. The amount of fine to be charged upon the member may extend to 100% of such false/incorrectly/non reported amount of margin and/or suspension of trading for appropriate number of days.
This will come into force September 1, 2019.
The Stock Exchanges and Clearing Corporations are directed to:
a. Bring the provisions of this to the notice of their members along with illustration as required and also disseminate the same on their websites.
b. Make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above directions in co-ordination with one another to achieve uniformity in approach.
c. Communicate to SEBI, the status of the implementation of the provisions of this circular in their Monthly Development Reports.
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