Sebi imposes Rs 10 lakh fine on Anand Rathi for violation of stock brokers' norms
India’s market regulator Sebi fined Anand Rathi Share and Stock Brokers ₹10 lakh after inspections found multiple regulatory violations, including delayed glitch reporting, excessive capacity utilisation, weak password policies, patch management f...
By Shivendra Kumar, ETMarkets.com |
Agencies
Sebi penalises Anand Rathi ₹10 lakh for compliance failures, delayed glitch reporting, weak cybersecurity systems and breaches of stock broker regulations during a 2023–2024 inspection.
Market regulator Securities and Exchange Board of India (Sebi) on Friday imposed a fine of Rs 10 lakh on Anand Rathi Share and Stock Brokers Limited after finding the company in violation of its stock brokers regulation.
In its investigation launched on June 17, 2025, the market watchdog found the brokerage lacking in compliance related to several stock brokers' regulations. The inspection was conducted for the period between April 1, 2023 and August 31, 2024.
In a 42-page order, Sebi held that Anand Rathi failed in reporting technical glitches that occurred on May 21, 2024 within the stipulated time.
The company in its defence, said that it had intimated the exchanges about the glitch with an hour of the incident while submitting the preliminary report on the next day. However, it admitted the delay in the submission of Root Cause Analysis (RCA).
The order also noted that Anand Rathi breached the capacity utilization threshold limit by setting it at 85% & 95%, going beyond 70 % of installed capacity.
The brokerage firm was also found to be in violation of patch management norms.
Among other things, Anand Rathi violated provisions related to the password policy.
Sebi also found that Anand Rathi did not have adequate data leakage prevention (DLP) systems in place during the inspection period, as required under Securities and Exchange Board of India regulations and National Stock Exchange of India guidelines.
Although the broker claimed it had earlier deployed a McAfee solution in 2020 and later implemented Zscaler, Sebi noted that the McAfee subscription had expired in December 2021 and there was no proof of renewal or active use during the inspection period. Evidence provided for the Zscaler system showed implementation only after the inspection.
Accordingly, SEBI concluded that the broker had violated data security provisions requiring deployment of tools to detect and prevent data leakage.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
In its investigation launched on June 17, 2025, the market watchdog found the brokerage lacking in compliance related to several stock brokers' regulations. The inspection was conducted for the period between April 1, 2023 and August 31, 2024.
In a 42-page order, Sebi held that Anand Rathi failed in reporting technical glitches that occurred on May 21, 2024 within the stipulated time.
The company in its defence, said that it had intimated the exchanges about the glitch with an hour of the incident while submitting the preliminary report on the next day. However, it admitted the delay in the submission of Root Cause Analysis (RCA).
The order also noted that Anand Rathi breached the capacity utilization threshold limit by setting it at 85% & 95%, going beyond 70 % of installed capacity.
The brokerage firm was also found to be in violation of patch management norms.
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Among other things, Anand Rathi violated provisions related to the password policy.
Sebi also found that Anand Rathi did not have adequate data leakage prevention (DLP) systems in place during the inspection period, as required under Securities and Exchange Board of India regulations and National Stock Exchange of India guidelines.
Although the broker claimed it had earlier deployed a McAfee solution in 2020 and later implemented Zscaler, Sebi noted that the McAfee subscription had expired in December 2021 and there was no proof of renewal or active use during the inspection period. Evidence provided for the Zscaler system showed implementation only after the inspection.
Accordingly, SEBI concluded that the broker had violated data security provisions requiring deployment of tools to detect and prevent data leakage.
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(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
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