SBI-SG Global Securities Services resolved a case with the Securities and Exchange Board of India (Sebi) by paying Rs 29.25 lakh in settlement charges. The case involved alleged breaches of foreign portfolio investor (FPI) rules and other regulations. The settlement was reached after SBI-SG Global Securities Services submitted a request under Sebi’s settlement regulations.

The company, a Sebi-registered designated depository participant (DDP), faced adjudication proceedings initiated by a show cause notice dated May 8, 2024. According to N Hariharan, Sebi’s chief general manager and adjudicating officer, the proceedings were concluded following the acceptance of the settlement terms by SBI-SG Global Securities Services.

Inspection Findings and Allegations

Sebi conducted an inspection of SBI-SG Global Securities Services covering April 2021 to March 2023. The inspection revealed certain non-compliances with FPI regulations and operational guidelines for FPIs and DDPs. These findings led to allegations against the company.

One of the key allegations was that SBI-SG Global Securities Services granted FPI registration to seven foreign investors without verifying if they were under common ownership or control with other registered FPIs. This was seen as a potential violation of forming an investor group.

Additional Allegations and Show Cause Notice

Further allegations included delays in processing surrender applications for seven FPIs and failing to maintain accurate electronic records for 13 FPIs on the NSDL portal. These issues prompted Sebi to issue a show cause notice on May 8, 2024, against SBI-SG Global Securities Services.

Following this notice, SBI-SG Global Securities Services submitted revised settlement terms. These terms received approval from Sebi’s High Powered Advisory Committee (HPAC), leading to the resolution of the matter.

Settlement and Future Implications

After remitting the settlement amount, SBI-SG Global Securities Services settled the case with Sebi. However, the order does not prevent Sebi from taking further action under settlement norms. This includes potentially restoring or initiating proceedings related to the settlement order against the company.

The resolution of this case highlights the importance of compliance with regulatory norms for financial entities. It also underscores Sebi’s role in monitoring adherence to these regulations within India’s financial markets.