SEBI Issues Caution to DAM Capital Regarding Operational Shortcomings
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Synopsis
DAM Capital Advisors has received a warning from SEBI regarding operational issues in its institutional broking business. The company has taken corrective measures and clarified that this warning does not impact its financial status or operations.
Key Takeaways
- DAM Capital received a warning from SEBI.
- Operational deficiencies were identified in broking activities.
- The company has implemented corrective measures.
- No financial impact reported due to the warning.
- Stock performance remained strong despite the caution.
New Delhi, March 21 (NationPress) DAM Capital Advisors, which was recently listed, announced on Friday that the Securities and Exchange Board of India (SEBI) has issued a formal warning due to certain operational shortcomings in its institutional broking segment.
The capital markets regulator dispatched the warning along with a deficiency notice, advising DAM Capital to exercise greater diligence in its operational activities.
“In accordance with the stipulations of Regulation 30 in conjunction with Para A of Part A of Schedule III of the SEBI Listing Regulations, we hereby notify that the Company received an administrative warning and deficiency letter on March 20 from SEBI, urging us to remain vigilant regarding specific operational issues related to our Institutional broking activities,” the company stated in its filing with the stock exchange.
The concerns were identified during a review conducted by SEBI between February 1, 2024, and August 31, 2024, prior to the listing of the company’s equity shares.
DAM Capital confirmed that it has already taken corrective actions in response to SEBI’s concerns and has instituted necessary compliance measures to meet regulatory standards.
The company further clarified that the SEBI notice does not affect its financial position, operational workflow, or overall business activities.
“There is no effect on the financial situation, operations, or other activities of the Company as a result of the aforementioned letter,” the company added.
In its filing, DAM Capital disclosed that SEBI carried out a themed inspection in January 2025, concentrating on the “Upstreaming and Downstreaming of Clients’ Funds.”
Upon reviewing the company’s feedback, SEBI highlighted areas needing enhancements, including delays in transferring client funds to the Clearing Corporation, instances where brokerage fees were directly credited to the company's bank account instead of the specified settlement account, and reporting deficiencies such as incorrect values and missing retention reason codes in the segregation file.
Despite the regulatory caution, DAM Capital’s shares performed robustly during Friday’s trading session, closing approximately 5 percent higher at Rs 232 per share on the National Stock Exchange (NSE), indicating a gain of 4.68 percent.
