Synopsis
The Securities and Exchange Board of India (SEBI) has sent a regulatory caution to IIFL Capital Services over concerns about their due diligence in managing debt securities, following a recent inspection. The firm assures that this warning does not impact its financial stability.Key Takeaways
- SEBI issued a warning to IIFL Capital.
- Concerns raised about due diligence on debt securities.
- The warning letter was received on March 10.
- No financial impact reported by IIFL Capital.
- Company's stock remained stable post-warning.
Mumbai, March 11 (NationPress) The Securities and Exchange Board of India (SEBI) has served a regulatory caution to IIFL Capital Services concerning its diligence in managing debt securities, as disclosed by the firm to the Indian stock exchanges on Tuesday.
The brokerage revealed in an exchange filing that it received a formal warning letter from SEBI dated March 7.
“The notice was received on March 10, following an examination of its merchant banking division’s debt matters from April 1, 2022, to April 30, 2024,” the firm stated in its filing.
The review concentrated on the company's adherence to the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021.
The market regulator expressed concerns regarding the disclosure of expenses related to the issue and the timelines for compensating intermediaries as outlined in the offer documents.
In response to the firm's feedback on the inspection results, SEBI issued a warning letter emphasizing these concerns.
IIFL Capital has assured that there is no financial repercussion on its operations due to the actions taken by the market regulator.
The firm clarified that the warning does not influence its business activities or financial outcomes.
The company's shares maintained stability, trading at Rs 207.85, an increase of 1.46 percent on the Bombay Stock Exchange (BSE) on Tuesday.
In the meantime, SEBI has previously enforced stringent measures against companies for infractions related to debt merchant banking.
It had previously barred Axis Capital and JM Financial from engaging in debt merchant banking activities due to non-compliance with regulatory standards.
Last week, the market regulator issued a formal warning to the FMCG leader Nestle India for violating insider trading laws.
The warning, delivered by SEBI’s Deputy General Manager, was directed to the company’s Compliance Officer (CCO).
SEBI indicated that the breach involved a “contra trade,” which transpires when an insider engages in buying or selling shares of the same security within six months of a prior transaction, aiming for quick profits.
