SEBI Cancels Karvy Stock Broking's Registration, Holds Karvy Liable For Outstanding Dues

The Securities and Exchange Board of India (Sebi), India's market regulator, has terminated Karvy Stock Broking's (KSBL) certificate of registration on Wednesday, May 31, Sebi issued this order.

"Irrespective of the cancellation of the Certificate of Registration, the Noticee shall continue to be liable for anything done or omitted to be done as a Stock Broker and continue to be responsible for payment of outstanding fees and dues, if any, payable to Sebi," the Sebi order stated.

A stock broker serves as an interface for retail investors in the securities market and is thus needed to maintain high standards of integrity and fairness in the conduct of its business operations in order to maintain investor trust.

In November, Karvy Broking was designated a defaulter and barred from trading on the stock exchanges.

"This Order shall come into force with immediate effect," it added.

The Karvy and its promoters were barred from the market for seven years by a Sebi order issued on April 28, 2023. This was done for a variety of infractions, including misappropriation of customer stocks and diverting proceeds from pledging them to the stock broker's affiliated companies.

"The Depositories i.e. NSDL and CDSL, in order to prevent further misuse of clients'securities by KSBL, are hereby directed not to act upon any instruction given by KSBL in pursuance of power of attorney given to KSBL by its clients, with immediate effect", the order further said.
Karvy will be accountable for any outstanding debts.