Key Points
ICICI Securities violated margin trading facility regulations
Software module failed to liquidate shares from Nov 2022-May 2023
Settled allegations by paying Rs 80 lakh fine
Did not admit or deny SEBI's claims
The violations were mainly related to margin trading facilities (MTF).
The market regulator had accused ICICI Securities of not following the agreed terms under the margin trading facility.
According to SEBI rules, any unconfirmed pledge securities under MTF must be squared off by the next trading day (T+1).
However, the company allegedly failed to do so and instead kept these securities in the Client Unpaid Securities Account (CUSA) or the pool account without pledging them.
This violated multiple SEBI circulars and stockbroker regulations. Another major issue was a software glitch in ICICI Securities' system.
The module responsible for liquidating shares was not functional from November 11, 2022, to May 31, 2023.
As a result, securities lying in the CUSA or pool account could not be squared off for MTF clients.
This disruption led to operational inconsistencies and non-compliance with SEBI regulations.
The market regulator also found that ICICI Securities had allegedly provided incorrect data regarding unconfirmed pledge securities under MTF.
"Hence, there was a malfunction in the software of the applicant, which led to business disruption/variance in the normal functions/operations/services of systems of the applicant resulting in a technical glitch during the period November 11 2022-May 31, 2023, and the aforesaid glitch was not reported to the Exchanges," the order read.
Despite these allegations, ICICI Securities chose to neither admit nor deny them. Instead, it applied for a settlement, which was later approved by SEBI's high-powered action committee.
The order related to the settlement has been uploaded on SEBI's website.
Meanwhile, the market regulator on February 9 proposed new rules to improve corporate governance at listed companies.
The proposals focus on revising the format of the Annual Secretarial Compliance Report (ASCR), setting eligibility criteria for appointing auditors and introducing monetary limits for approvals of Related Party Transactions (RPTs).
