Markets regulator SEBI on Thursday barred Karvy Investor Services Ltd (KISL) from taking new clients for allegedly violating regulatory norms.
KISL had also not paid the renewal fee for the block, December 2022 to December 2025, to the regulator as prescribed MB norms
Markets regulator SEBI on Thursday barred Karvy Investor Services Ltd (KISL) from taking new clients for allegedly violating regulatory norms.
The order came after SEBI carried out an physical inspection for the purpose of verifying its compliance status with various regulatory requirements while handling the public issues of debt securities during FY 2021-22.
In a 13-page ex-parte ad interim order, SEBI found that KISL neither has any physical infrastructure nor any employee working for it. Without any physical infrastructure and employees no merchant banking activity can be carried out.
So, it is concluded that KISL is no longer in operation as a SEBI-registered merchant banker.
By not having the necessary infrastructure and manpower to discharge its activities as a merchant banker, KISL has violated Merchant Bankers (MB) regulations, SEBI said in the order.
"Presence of such an entity (KISL) which is not in operation, and which is in breach of the eligibility conditions for being a SEBI registered merchant banker, could pose a serious threat to the integrity of the securities market and the interests of investors," SEBI's whole-time member Ashwani Bhatia said in the order.
KISL had also not paid the renewal fee for the block, December 2022 to December 2025, to the regulator as prescribed MB norms, SEBI noted.
Accordingly, KISL is restrained from taking any new clients or assignments till further orders.
The direction takes effect immediately and will be in force until further orders, it added.