Karvy Stock Broking in big trouble

New Delhi: Leading stock exchanges BSE and NSE on Monday suspended Karvy Stock Broking Ltd's trading licence for all segments due to non-compliance of the regulatory provisions of the bourses.

The move comes after Sebi, through an order passed on November 22, barred Karvy from taking new clients in respect of its stock broking activities and had also prevented it from using the power of attorney (PoA) given by clients after the broker was found to have allegedly misused clients' securities.

In two separate circulars, the bourses announced that they "have suspended Karvy Stock Broking Ltd with effect from December 2, 2019 due to non-compliance of the regulatory provisions of the exchange".

The BSE said it has deactivated trading terminals of Karvy in equity and debt segment and put them in the risk reduction mode in equity derivatives, currency derivatives and commodity segment.

Sebi's directive had come after the National Stock Exchange forwarded a preliminary report to it on the non-compliances observed with respect to pledging/misuse of client securities by Karvy.

The exchange's preliminary report is the result of the limited purpose inspection of Karvy conducted by it on August 19, covering a period from January 1 onwards, Sebi had said in its order.