The Securities and Exchange Board of India (SEBI) has imposed a monetary penalty of Rs 2 lakh on Motilal Oswal Financial Services Ltd. (MOFSL) for incorrect reporting of client information on stock exchanges, citing a lapse in due diligence expected from a registered intermediary.
According to the adjudication order, MOFSL had submitted erroneous Unique Client Code (UCC) details for three clients, resulting in mismatches between actual client PANs and those reported to the exchanges (NSE and BSE). Although the violations were not found to be fraudulent, SEBI noted that such discrepancies undermine market surveillance mechanisms and regulatory oversight.
The regulator emphasized that stock brokers play a key role in maintaining transparency and integrity in the market, and that accurate UCC mapping is crucial for traceability of trades, especially during abnormal market movements or in investigations involving potential misconduct.
SEBI acknowledged MOFSL’s submission that the errors were technical and had been rectified, but maintained that the firm failed to exercise adequate care and diligence in fulfilling its regulatory obligations.
The penalty has been imposed under Section 15HB of the SEBI Act, which allows for punishment in cases of contravention where no specific penalty is prescribed.
This order serves as a reminder to all market intermediaries to maintain strict compliance protocols and ensure accurate client-level disclosures to the exchanges and regulators.
